The United Kingdom is really cracking down on the cryptocurrency sector. While other countries and their central banks are welcoming virtual currencies with open arms, the UK Central Bank is putting its foot down.
Over the past two months, we have seen a lot from the UK regarding cryptocurrencies. First, Prime Minister Theresa May came forward and stated that cryptocurrencies need more regulation. We also witnessed the UK central bank terminate all of its plans to launch its own cryptocurrency. Not to mention what happened last week. I’ll give you a hint: it involves the UK Treasury and an investigation into cryptocurrency.
Today, we have received more news from the UK’s central bank regarding its thoughts on digital currencies – the head of the bank announced during the Scottish Economics Conference in Edinburgh that the bank plans to increase its efforts to tackle the use of virtual currencies in various illegal activities. For instance, cryptocurrencies like bitcoin are being used for money laundering.
Similar to what Theresa May announced, the governor of the Bank of England, Mark Carney, disclosed to the audience at the conference that there must be tougher regulations applied to exchanges. Why? Because this should help to restrain the illicit use of cryptocurrencies.
It’s worth mentioning that Carney did state that he doesn’t believe the cryptocurrency industry is a threat or poses any risks to the current financial system. However, he did say that as time goes on the issue could get bigger and then traditional institutions will be too far behind to make the improvements to their systems before the worst possible outcome occurs.
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Additionally, I find it important to comment on the bank’s view on regulation. Carney stated that cryptocurrencies provide a lot of innovation, and he isn’t against all that they can do. He solely believes that regulation would help the sector, allowing that innovation to be done in a more regulated environment. Personally, I agree that more regulation could do wonders for the industry.
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