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A bitcoin ATM prints out a receipt for a user at the Vape Lab cafe London
Image: A bitcoin ATM prints out a receipt for a user at the Vape Lab cafe, London. REUTERS/Peter Nicholls

United Kingdom Calls for Global Bitcoin Regulation

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Image: A bitcoin ATM prints out a receipt for a user at the Vape Lab cafe, London. REUTERS/Peter Nicholls

The British government has made a call for regulation on a global level for Bitcoin. The government is also seeking to make cryptocurrency regulation a topic addressed in March by the G20.

Addressed at the World Economic Forum

The subject of cryptocurrency and Bitcoin regulation came up at the World Economic Forum (WEF) which was recently held in Davos, Switzerland.

“I think we should be cautious about bitcoin,” said finance minister Philip Hammond, who was quoted by Bloomberg TV at the WEF. “Possibly we do need to look at the way we regulate this environment before the amount of outstanding bitcoin becomes large enough to be systemically important in the global economy. It is not there yet but it could get there soon,” he said.

Bitcoin and other cryptocurrencies differ from traditional currencies in that they are not created or regulated by national banks or governments. Instead, they rely on blockchain technology in which the encrypted digital coins are generated by complex supercomputers.

Cryptocurrency Community Regulation

Instead of being regulated by central banks or governments, virtual currencies such as Bitcoin have a certain degree of oversight by users who work as a community to protect against counterfeiting.

“What is really important is in regulating the cryptocurrencies we do not inadvertantly constrain the potential of the technology that underlies, the blockchain technology, which a wider and more important application,” said Hammond at the WEF. “It needs to be done at the international level and of course it will be on the agenda for the G20 meeting in Argentina,” he added.

The G20 meeting will be taking place later this year. The United Kingdom is pressing to make global Bitcoin and cryptocurrency regulation a topic for discussion at the event.

Taking Crypto Seriously

While many continue to have their doubts about whether these digital currencies should be considered to be worthy investments, the last year has demonstrated their capability for exceptionally rapid growth and must be taken seriously.

As many of the virtual coins, particularly Bitcoin, quickly accumulate larger value, they are starting to work their way into the mainstream. At this point, regardless of whether they are a worthy investment, many governments feel that it is increasingly important that regulation be implemented to help to protect investors and economies.

Note: The opinions expressed in this article are the author's own and do not necessarily reflect the view of Alvexo on the matter.