Two of the leading UK industry bodies, the British BankersAssociation and the Payments Council have called for the domestic Government totake a careful approach to regulation of the underlying bitcoin block chaintechnology. The two bodies responding to the UK Government’s call forinformation on digital currencies last year, suggest that one method toregulate the digital currency would to bring cryptocurrency firms under thescope of the Fourth EU Anti Money Laundering Directive as ‘obliged entities’.
With the true opportunities of block chain technology notfully understood, the UK industry bodies want the government to be careful whenit comes to the technology. In the submission to the Government, the BritishBankers Association and the Payments Council wrote, “The ledger technologyoffers potential opportunities to fundamentally change the way many valuetransactions both within and outside of the payments system are made, includingthe distribution and communication of assets, company shares, and securities.The ledger presents an opportunity for the industry to explore how thistechnology can be used to improve and enhance the existing fiat UK paymentsystems, or make use of the technology in a more structured way, similarly tothat used in the commodity (such as gold and silver) markets.”
While there is some debate whether the Government has thepowers to intervene in the development of the block chain, the support from theBritish Bankers Association and the Payments Council highlights that in the UK,there is significant interest in future innovation within the formal paymentssystem that will ensure that the UK remains one of the leading electronicpayment markets around the world.
For more information on digital currency regulation, seeMercator Advisory Group’s Research Note, GlobalDigital Currency Regulations: Divergent Paths (http://www.mercatoradvisorygroup.com/Notes/Global_Digital_Currency_Regulations__Divergent_Paths/) released in October 2014.
Overview by Tristan Hugo-Webb, Associate Director, Global Payments for Mercator Advisory Group
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