HM Treasury has been aware of the developing Bitcoin space for quite some time, yet previously (2013) they had agreed to take a “wait and see” approach, allowing businesses in the bitcoin space to develop within the UK without any hindrance.
Earlier this year, George Osborne (Chancellor of the Exchequer), asked HM Treasury to investigate the potentials of digital currency, and what the government’s role in this emerging sector should be. Since then HM Treasury has investigated and researched bitcoin and the development of businesses in this sector.
From talking with people working in the sector, and from Osborne’s own speech:
The British Business Bank has already committed over $100 million of new funding to Fin Tech companies and to the development of new and innovative forms of finance.This investment program has benefited many companies represented here, and many other small, innovative businesses.But I want it to go much further. So today I can announce I am extending the scheme with another $100 million. ~ George Osborne.
It has been understood that HM Treasury would like the UK banks on board, they want banks to offer emerging businesses assistance. The hope is to stimulate growth and the economy and for the UK to be a part of this digital financial revolution, and somewhere along the lines it is believed that minimal regulation to appease the banks will need to be made, whilst at the same time keeping the UK as an appealing place for bitcoin related businesses to come to and to flourish.
The questions asked by HM Treasury are aimed at the global bitcoin sector, though the effects would only be the UK, and likely the Commonwealth (53 countries), European countries that follow UK banking practices, and the banks that have their HQ based in London (most of whom are global entities) would also be affected.
Though it should be understood that the public questions at this time are only one stage of the process. After the public feedback there is likely to be dissemination of the information, then possibly recalling of individuals and experts to discuss this dissemination, then a report compiled for George Osborne.
Such a report would contain recommendations for regulations (or lack of) for the purposes of stimulating digital financial growth for the UK. After such a report might come Committee meetings, and then (possible) regulatory oversight.
Though for now, taking each day at a time, the general public within the bitcoin space have been asking to be involved with any decision making, especially when it relates to regulations. Not to have authority figures and establishments decide the fate of the sector without proper feedback from those involved in the space, and not just the businesses with business interests, but the individuals, the users.
As with Bitlicense everyone wished the get involved, and this time they have a great opportunity to get involved in as little as they wish, or extensively with thoroughly answered questions. HM Treasury has asked thirteen questions with a brief for each section to assist individuals and businesses in formulating a response.
There is recognition from George Osborne that banks need competition, and that the emerging digital sector will be a key element in providing this much needed competition and alternative to the traditional banking system.
I’m here today because I want the UK the lead the world in developing Fin Tech. That’s my ambition short and sweet. ~ George Osborne
There is definitely the element within the bitcoin community that does not want any regulation, and throughout the questions HM Treasury asked numerous if it would be better to have no government regulation in that particular area, and if no regulation would an alternative interaction be appreciated, or even needed?
Question 8 One of the ways in which the government could take action to protect users is to regulate. Should the government regulate digital currencies to protect users? If so, should it create a bespoke regime, or regulate through an existing national, European or international regime? For each option: what are the advantages and disadvantages? What are possible unintended consequences (for instance, creating a barrier to entry due to compliance costs)? What other means could the government use to mitigate user detriment apart from regulation? ~ HM Treasury.
Part of the push for this public consultation was to give people the opportunity to say “No”. Remember, bad people and bad things only need apathy from those that wish a better world for things to go the bad way.
Keep in mind that this just one more step on a steady road to progress, and that this is your opportunity, short or long, to give voice to your thoughts.
Joel loves Bitcoin and Digital Currency. He holds a BSc (hons) in Criminology with Criminal Justice Studies and Sociology, is a member of the Ludwig Von Mises Institute, a Lifetime Member of the Bitcoin Foundation, is involved in a few other bitcoin projects, and is Director of IBWT (""In Bitcoin We Trust""), a Digital Currency Exchange.