Money laundering is a major menace that the British government is facing. As a lot of people in the government think that Bitcoin and similar crypto-currencies are being used by some people to launder money, it wants to regulate Bitcoin exchanges. With such a measure it thinks it can stop their use as money laundering hubs.
The Treasury says that Bitcoin has potential for being used for money laundering and to curb the problem, it wants to regulate digital currency exchanges for the first time. However, this won’t mean that the government is against innovation in the nascent technology, what it all wants is criminal use of the digital currency is prevented.
The intentions from the UK Government became public when a document was released in conjunction with the announcement of UK’s 2015 budget. In the document the Treasury says it intends to apply anti-money laundering regulation to digital currency exchanges in the UK. According to the document it will create the right environment for legitimate actors in the space to flourish.
However, it will also make sure that a hostile environment for illicit users of digital currencies is created to deter the users. According to the Treasury it plans to launch a consultation later this year to seek views on how the new regulation should be shaped, including its scope and how existing anti-money laundering regulation should be specifically applied to the sector.
Nonetheless, the UK Chancellor of the Exchequer George Osborne had last summer announced that he would look into how virtual and digital currencies like Bitcoin should be regulated. His department launched a consultation seeking views from the industry on the matter and this document published is the government’s response to the first consultation.
Bitcoin Must not be used for Contraband Activities Says the Government
According to the released document the consultation will look to collect opinions on how to ensure that law enforcement bodies have the necessary skills and tools to identify and prosecute criminal activity relating to digital currencies, including the ability to seize and confiscate digital currency funds where transactions are for criminal purposes.
At the same time the government announces that it intends to develop a set of best practices and standards for digital currency businesses. Aimed to help consumers, give them protection, these are voluntary standards to be developed by the government, the British Standards Institution and the digital currency industry will set standards for the other countries.
To contact the reporter of this story: Deepak Tiwari at email@example.com