UK Minister Signals Crypto Regulation in Works

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According to a written response to Parliament from Lord Michael Bates, Minister of State at the Department for International Development, the UK government appears to be moving closer to issuing regulations for Bitcoin and other digital currencies. Bates issued a statement answering questions from Parliament Member Lord Jonathan Harris that covered topics ranging from crypto use for tax payments to regulation and banks that refuse to provide account services to cryptocurrency businesses.

On the issue of allowing taxpayers to use cryptocurrency to pay their tax obligations, Bates wrote:

"HM Revenue and Customs does not offer digital currencies as a payment method and has no current plans to do so."

Lord Harris had also asked about any government plans to reform the country’s capital gains taxes to accommodate digital currency. Bates’ answer suggested that reform was unnecessary at this time: “Gains made on digital currency are currently chargeable at the normal Capital Gains Tax rates, depending on the facts of the case. The government keeps all tax policy under review.”

In response to a question about whether the government has plans to expand money laundering regulations to cover digital currency exchanges, Bates wrote:

“The Government is currently negotiating amendments to the 4th Money Laundering Directive that we expect to bring virtual currency exchange platforms and custodian wallet providers into the scope of Money Laundering and Counter-Terrorist Financing regulation. This will require such firms to conduct due diligence upon their customers, with their activities being overseen by national competent authorities for these areas. The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017/early 2018.”

Despite signaling the government’s intent to get more involved in monitoring and regulating the cryptocurrency industry, Lord Bates suggested that crypto-related startups should not expect any helpful intervention any time soon. His response to a question about the banking industry’s refusal to offer accounts to digital currency companies clearly indicated a more hands-off approach:

"The stance of individual firms towards providers of digital currencies is a commercial decision for those firms, and it would not be appropriate for the Government to intervene.”

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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