Cryptocurrency in the UK — a tough progress?
The United Kingdom’s relations with cryptocurrencies are quite complex. Since crypto is a decentralized entity, the government has many doubts about streamlining digital money. Still, Great Britain is one of the leading destinations for crypto-based companies and projects with many exchanges like Coinbase and Gemini having offices in the country. People are provided with some easy ways to invest in cryptocurrencies, since they are much more enthusiastic about it than the government.
Moreover, Michelmores LLP, a London-based law firm found in a survey that about 20% of UK’s affluent millennials have invested in Bitcoin and other cryptocurrencies. This was at a time when the country’s Financial Conduct Authority (FCA) suggested a crypto ban — the entire crypto ecosystem had caught its attention.
Nevertheless, seeing the enthusiasm of people towards cryptocurrency, it is believed that the United Kingdom will remain a crypto-friendly place, making the purchase of digital assets quite easy and quick.
A brief history of crypto in the UK
The country was proactively supporting the crypto industry when it first stepped foot in the UK. The United Kingdom was showing all the signs of becoming an international hub for the cryptocurrency industry. The British Prime Minister’s Office in 2015 made an effort to promote the crypto market overseas, especially the Bitcoin industry.
However, things have been changing over the last few years. For starters, the government is not really keen towards Bitcoin anymore, although it still supports blockchain technology. Moreover, banks and financial institutions are not listing Bitcoin startups in the UK.
As a result, there is a drastic drop in the progress of cryptocurrencies in the country, driving crypto entrepreneurs and startups out of its banking system. A Bitcoin brokerage named Cryptopay stopped supporting British Pound withdrawals and deposits due to the new bank policies. Because of that, users are now limited to using SEPA (Single Euro Payments Area) at Cryptopay.
In the last couple of years, Bitcoin exchanges, along with other crypto brokerages in the UK, have suffered a lot considering the fact that the banks have started to withdraw their support for cryptocurrencies. For example, Britcoin, which was rebranded as Intersango, faced issues with bank transfers, before it eventually closed down. Moreover, Bit121, another promising crypto exchange, had a decent start in the UK. But in 2014, the exchange was closed as the banks withdrew their support.
With the government being strict with the industry, the popularity of cryptocurrencies has only increased in the United Kingdom. More and more people are drawn towards this next-gen digital asset in the hopes that it will one day become an integral part of the payments system.
Is crypto popular in the UK today? What is its legal status?
The cryptocurrency regulation in the United Kingdom is rather unclear. However, the citizens can sell or buy the likes of Ethereum and Bitcoin without any hassle. In the present scenario, the crypto market in the country is a little translucent picture. This is mainly because the banks in the UK abruptly withdrew their support on cryptocurrencies, leaving the industry-backed businesses to stop working in the sector. Unfortunately, for crypto advocates and enthusiasts in the country, it isn’t an optimistic fact either.
The Financial Conduct Authority has a quite limited remit in the crypto market. FCA’s authority only came into effect earlier this year in January. Currently, the FCA is responsible for monitoring and regulating cryptocurrency businesses to make sure that they are acting in accordance with measures surrounding counter-terrorism and anti-money laundering financing. Nevertheless, the organization has stressed that it will not be responsible for inspecting how the crypto exchanges treat their customers and that they will not be able to help in case the funds are protected insufficiently.
On their website, you can see they warn the citizens that digital currencies are speculative purchases that possess very high risk. And they also claim that it is a marketplace which is regularly a target for scammers and fraudsters.
So, what’s the current state of cryptocurrency in the UK? Is it legal? The answer is yes. The crypto regulations formed by the government are quite supportive of its customers. That is, cryptocurrencies like Ethereum and Bitcoin can be easily purchased in the UK. The only concern of the government is that since cryptocurrency works in a decentralized environment, it can be easily manipulated to launder money and used to finance terrorism.
Nevertheless, there are certain restrictions on how consumers engage with the crypto market. For instance, the majority of the crypto exchanges in the UK have their own operations within the country. However, it majorly depends on KYC (know Your Customer) checks the users have completed. This includes submitting personal identification like a driver’s license or a passport.
The most well-known crypto projects from the UK
There are numerous crypto projects based in the United Kingdom. The most popular ones include:
- Blockchain.com is a crypto exchange and a wallet launched in 2011. Its wallet is the most sought-after one in the UK that stores both fiat currency and cryptocurrency either in ETH, BCH, or BTC. There are about 27 million crypto wallets registered on the platform.
- Blockverify is a blockchain-based platform that provides anti-counterfeit measures to numerous organizations and industries.
- DADI stands for Decentralized Architect for a Democratic Internet. It is a blockchain startup that works on providing solutions of the next-generation internet.
- SETL is a blockchain setting that strives to provide real-time and unified financial settlements. It offers trusted and reliable verification services and expedited transactions that allow a direct transfer of funds between the receiver and the sender.
- BC Bitcoin is a cryptocurrency brokerage firm launched in 2017 that allows customers to buy and sell over 100 different cryptocurrencies.
For an investor residing in the UK, the crypto market is still nascent. The government is trying its very best to study the market and establish rules and regulations over the use of cryptocurrencies. One can only hope that authorities will slowly lose its strings on the market, allowing the investors and users to explore a very lucrative industry.