The Financial Conduct Authority (FCA) has announced a new initiative to help bitcoin businesses in the UK. The move marks a shift in approach for the regulator, which has steered clear of digital currency until now.
The FCA’s hands-off approach to digital currencies like bitcoin has not had a negative effect on the UK’s bitcoin companies, however. The nation remains one of the most attractive jurisdictions for bitcoin businesses, with the continent’s biggest financial hub at its heart.
Project Innovate is launched
The new fast-track initiative, Project Innovate, was announced by FCA Chief Executive Martin Wheatley in London last week.
The authority now says it wants to ensure “positive developments” like bitcoin are supported by the nation’s regulatory environment.
Project Innovate is designed to promote innovation in the financial sector and the FCA wants to create room for “the brightest and most innovative” companies to enter the space.
Wheatley reflected on a number of questions relevant to digital currency businesses, namely innovation and novel business models. He also recognised that some developments managed to transform finance in “improbable timescales”. These developments include crowdfunding, digital currencies and peer-to-peer technologies.
COINsult’s regulation, compliance and risk consultant Sian Jones believes the FCA’s initiative could provide digital currency businesses with much-needed regulatory certainty and crystallise the UK’s status as the go-to digital currency jurisdiction.
However, Jones points out that it remains to be seen if and when the FCA plans to announce its official position on digital currencies, or whether or not Project Innovate results in “light touch” regulation or no regulation at all.
“Then, if Britain’s banks would only open their doors to Bitcoin businesses or a Fidor-like challenger bank were to emerge in the UK, that really would be something.”
UKDCA and UK’s stance on bitcoin regulation
Jones is also a founding member of the UK Digital Currency Association (UKDCA), which launched last March.
The UKDCA has consulted Her Majesty’s Revenue and Customs (HRMC) on bitcoin-related issues and it has hosted a number of events in an effort to raise awareness and discuss regulatory issues. The UKDCA board includes Bullion Bitcoin owner Adam Cleary, Elliptic CEO Tom Robinson and BankToTheFuture.com co-founder Simon Dixon.
The UK’s position on digital currencies is relatively ambiguous, but that did not stop many bitcoin operators from incorporating in the UK. In a CoinDesk feature, technology lawyer Eitan Jankelewitz explained how UK regulation applies to digital currencies and what makes Britain so attractive for bitcoin businesses. However, he also concluded that the lack of regulation has caused more problems than opportunities for bitcoin businesses.
In late October the British Government launched a programme to support so-called Challenger Businesses, businesses based on new technologies, with vigorous business models and innovative products.
Following meeting with members of the FinTech community, the Challenger Business team published a set of conclusions, identifying the same disruptive and innovative trends mentioned by FCA’s Martin Wheatley. These included peer-to-peer loans, crowdfunding, digital currencies, as well as new payment schemes and anti-money laundering (AML) regulations.
June 03, 2014 at 12:02PMLatest Bitcoin News | BTC/LTC Robot | Mining ASICS | BTC Debit Card
