UK Government to Continue Supporting Bitcoin

Yannick Losbar @CryptoInvest
October 24, 2014

Following previous “favourable” announcements about the Digital Currency from the Chancellor,  the UK’s minister for the digital economy Ed Vaizey demonstrated once again the government ‘s strong ambition for Bitcoin, by asserting that it will continue to support the digital currencies:

“We’re doing a major program of work looking at opportunities in digital currencies.We want to make these e-payments faster, quicker, we want to make it as safe as possible. And we want to look at the kind of technologies that the digital currencies use to allow end systems to operate in a de-centralized way, with no intermediaries. We want to look at how the new technologies can benefits consumers and the wider economy. So that’s something the Treasury is very interested in.”

Determined to put words into action, Vaizey has detailed during a meeting with our colleagues from TechCrunch how he will proceed to make London – and more generally the United Kingdom – a place of first choice for the financial technology industry:

“We’ve got research going on about what kind of work we can do to turbocharge fintech [..] and we are very strongly of the view that London and the U.K. can take a lead in fintech”

Also read: UK Chancellor to Outline Bitcoin Measures in Budget 2015

UK: Welcoming Bitcoin?

Many startups, like or Netagio, make their home in the British capital. However, the approaches are difficult for the rare entrepreneurs wishing to settle there, especially with banking relationships troubled as indicated by Brian Armstrong, CEO of bitcoin startup Coinbase. “Getting banks on board is challenging,” admits the Bitcoin entrepreneur, who points out that there are no British Banks currently offering accounts to bitcoin startups. However, this seems a problem more tied to the perception of Bitcoin by banks, rather than a local issue. Armstrong added:

“The banks are usually quite skeptical. That’s a hard, difficult process that involves a lot of meetings.In other markets, it has taken six months of meetings just to get them comfortable.”

We must point out the fact that financial institutions like banks are subject to very strict identity verification requirements  in relation to their clients’ customers. A startup in the Bitcoin area where transactions involve non-identifiable sources thus represents a “bad” client for these different institutions. These banks, by agreeing to cooperate with bitcoin startups, risk fines and strong penalties related to Anti Money Laundering policy. In addition, some North American states like New York seems determined to tighten the regulatory framework for the digital currency industry. The battle promises to difficult for bitcoin entrepreneurs!

What do you think of the UK’s stance towards Bitcoin? Comment below!

Images from Shutterstock.

Last modified (UTC): October 25, 2014 20:13