London's plan to build a global Bitcoin trading center has received support from the British government

Recently, according to British media reports, London, England, the global traditional currency trading center with a daily trading volume of up to 5 trillion US dollars, is trying to develop into a Bitcoin trading center, while the latter is still a controversial topic.

London has become a traditional foreign exchange trading center, but it is still striving to become the world's most important financial technology center (Fintech) to compete with San Francisco's network competition technology and New York's financial influence. Therefore, striving to become a global Bitcoin trading center is one of the steps.

In this context, Bitcoin technology enthusiasts are constantly driving London to become a real currency trading center for Bitcoin, with transactions based on encrypted electronic currencies (cryptocurrencies). Although Bitcoin is the original variety of encrypted electronic currencies, it is still very popular. CoinScrum, the world's largest Bitcoin trading organization with more than 2,200 people, also plans to follow the trend and go to the UK to start a Bitcoin trading company.

Nicolas Cary, one of the founders of Bitcoin wallet provider Blockchain, said, "London has been the base of financial innovation for hundreds of years. If it does not strive to develop into an electronic currency trading center, it will be a mistake, knowing that London has accumulated a lot of talent and experience."

At the current exchange rate of approximately $220 per Bitcoin, there are more than 14 million Bitcoins in circulation, with a total value of approximately $3.1 billion.

Positive attitude

Although some people believe that the overall development prospects of London, a traditional financial center, still lag behind New York in the United States, judging from New York's attitude towards electronic currency - including New York State's plan to issue Bitcoin licenses (BitLicense) to start-ups, many people believe that London is more attractive as a digital trading center, and more and more technology start-ups choose to make their mark in London.

Last year, the British government exempted bitcoin transactions from VAT. Previously, the Australian government imposed a goods and services tax on bitcoin, which prompted CoinJar, a local bitcoin exchange that allows users to buy, sell and spend bitcoin, to move its headquarters to London in December last year. Other countries have yet to decide how to tax bitcoin transactions because the currency is independent of any central bank and taxes cannot be defined in the traditional sense of the currency.

Currently in London, people can convert cash into Bitcoin at seven ATMs and use it to pay for everything from Thai massages to dress design, pork chops to beer. One company even allows rent payments to be made with Bitcoin.

A young bitcoin holder at a trendy e-cigarette cafe exchanged £800 in notes for bitcoins at an ATM and sold them to people who needed them.

Jerry Brito, executive director of the Coin Center, a nonprofit in Washington, D.C., that promotes electronic currencies, said, "We are seeing a very different attitude towards the development of Bitcoin in the UK. This initiative is positive and innovative, and we must adopt a regulatory approach to avoid money laundering while working constructively with technical experts in the industry to achieve the goal."

Advocates of electronic currency trading say it is easier to conduct illegal transactions in bitcoin using cash and harder to track the flow of money. They point out that most U.S. dollars are linked to underground cocaine trades.

The governing body of London's financial district said in reference to Bitcoin trading that it "must be alert to potential risks and will take strong action if it finds evidence of criminal activity", but the employment and growth opportunities provided by the fintech industry are welcome.

Financial support

Swiss banking giant UBS will open a technology lab in London later this month to explore how bitcoin trading technology can be widely used in the financial services industry.

The potential of electronic money has been highlighted by British Chancellor of the Exchequer George Osborne, who has said he wants Britain to lead the world in financial technology.

Data from consulting firm Accenture shows that compared with 2013, investment in the fintech industry in the UK and Ireland doubled last year to US$623 million, accounting for 42% of European investment in the industry.

In addition to the new rules and standards for Bitcoin, the British government has pledged to invest an additional £10 million (about $15 million) to explore blockchain technology, the technology behind electronic money. The technology is essentially a public ledger that records and verifies every Bitcoin transaction and is impossible to tamper with in practice. However, the Bank of England [Weibo] said the technology could be revolutionary and that participants could eventually issue their own electronic money. Although there are many imitators of blockchain technology, none of them can match the weight of Bitcoin.