United Kingdom Looking into Bitcoin Regulation

United Kingdom has announced that they will look to regulate digital currencies such as Bitcoin by applying anti-money laundering regulation to digital currency exchanges in UK. The government plans to regulate digital currencies in order to support technology innovations but also plans to limit any opportunities for criminals to use digital currencies for illicit activities.

The report came along with annual budget statement in which government announced that they want to promote competition and innovation in payment systems, financial and other relevant sectors. Many governments have tried to stay away from Bitcoin because it is often connected with criminal activities and money laundering but UK apparently sees Bitcoin as positive innovation.

However, the authorities are aware of flaws and disadvantages of Bitcoin and other digital currencies so they will look to train law enforcement personnel and develop existing law enforcement techniques to prevent criminal activities. As it was mentioned in the report, several companies and users of digital currencies have recommended that government should set up a designated task force and trace suspicious transactions.

The government has also noted that key of anonymity and the ease of making payments are key drivers of potential criminal use and that currently they recognize the need for action to implement security measures. Their main plan is to implement effective anti-money laundering regulation and to make sure that law enforcement bodies have effective skills and legislation to recognize criminal activities related to digital currencies.

The authorities also want to raise the awareness and make sure that users know which services are safe to use and which are the main source of criminal activities.

The UK Treasury has announced that they will invest $14.74m in research on digital currencies' technologies and that they will work with the British Standards Association to develop standards that will protect customers.