A U-turn? The UK announces an investigation into Bitcoin

It is reported that the UK is investigating digital currency and blockchain technology from multiple angles, including the role of encrypted digital currency in the UK, and comprehensively assessing the overall risks that cryptocurrencies pose to central banks and traditional financial institutions, and determining whether it is necessary to take regulatory measures.

Regulation coming soon?

The UK appears to be preparing for the regulation of cryptocurrencies.

The Treasury Committee of the House of Commons is conducting an investigation into cryptocurrencies and blockchain technology, raising concerns about future regulation, The Telegraph reported.

Nicky Morgan, chair of the Treasury Committee, said the inquiry would assess "the potential risks posed by digital currencies to consumers, businesses and governments, including risks associated with market volatility, money laundering and cybercrime, to the extent that they could disrupt the economy and replace traditional means of payments."

However, the unregulated market is more worrying for cryptocurrency enthusiasts, and the committee will also assess whether the government and major financial institutions (such as the Bank of England and the Financial Conduct Authority) should regulate cryptocurrencies.

Change attitude and take positive actions

Many prominent figures in traditional finance are more than happy to inject positive momentum into cryptocurrency regulation. As The Telegraph reported, a Bitcoin expert at the Alan Turing Institute in the United Kingdom claimed:

A proper regulatory framework which will provide clarity on taxation and protect consumer rights is always welcome.

Robert Hannigan, the former director of the British National Communications Intelligence Agency (GCHQ), not only praised regulation, but also criticized Bitcoin. Robert Hannigan said:

Cryptocurrencies have a bright future, but Bitcoin has given them a bad name. We can’t abandon cryptocurrencies for Bitcoin. So far, ordinary people have not suffered losses and the economic impact has been minimal, thanks to the wise backing off of regulators. But as more people invest in cryptocurrencies, the Treasury Department seems to be watching it more closely, as other governments have already begun to do.

Meanwhile, economic sociologist and Oxford University professor Villi Lehdonvirta believes that both developers and investors will welcome the UK regulation, saying:

Many cryptocurrency developers and investors are pleased that the Treasury Department is adjusting its regulatory stance, as the right regulation will help integrate their solutions into the mainstream financial system.

Iqbal Gandham, Managing Director of eToro UK, agrees, saying:

We support such investigations because appropriate regulation of cryptocurrencies helps protect consumer safety, promotes best practices, and provides clarity for cryptocurrency service providers.

As a politically conservative newspaper, The Telegraph has reported on this, and we can’t help but call on the Bank of England, which recently rejected Bitcoin, to properly regulate cryptocurrencies, as this would be a good thing for the British government.

However, those who oppose regulation may argue that traditional financial institutions simply feel threatened by the cryptocurrency market. While deliberately stifling innovative technology, opponents are absorbing the essence of blockchain for their own personal growth.

What do you think about regulation by governments, central banks, and other financial institutions? Do you think cryptocurrency regulation is good for investors? Let us know in the comments below!