Prime Minister Theresa May has vowed to ‘very seriously’ consider whether to draw up tough new rules which govern the buying and selling of Bitcoin. Speaking at Davos, the PM called for closer scrutiny of the notoriously volatile virtual money markets, which are a long way from strong and stable. She said: ‘Cryptocurrencies like Bitcoin, we should be looking at these very seriously, precisely because of the way that they can be used, particularly by criminals.’ May also said there were huge possibilities for Britain to attract tech companies once Britain leaves the European Union. The merest mention of regulations is enough to send cryptocurrency markets into meltdown.
In the past fortnight, there have been two ‘bloodbaths’ in which the price of thousands of virtual coins plunged dramatically amid fears that a global clampdown would bring an end to the free-wheeling, unregulated nature of the crypto markets. South Korea – a huge market for virtual coins – will ban the use of anonymous bank accounts in cryptocurrency trading on January 30, its regulators announced. The French finance minister has also called for tough new regulations on cryptocurrencies to stop them being used to dodge tax or finance terrorism and other crimes.
However, one analyst thinks new rules could actually be good for digital currencies. Kevin Murcko, CEO of cryptocurrency exchange CoinMetro, said: ‘Regulation in the UK may not necessarily be a bad thing for the digital asset economy: government regulation is a legitimising force.
New regulations would mean people would feel safer investing in cryptocurrencies, as fraudulent brokers will be excluded from the market.” ‘As different nations move to regulate cryptocurrencies in different ways, the short-term impact on the markets will be outweighed by the longer-term stability afforded by consumer protections and the elimination of fraudulent entities and practices.
Compliance with an established regulatory framework, if done right, could lead to wider mainstream adoption of cryptocurrencies and greater stability in emerging markets. ‘It is my firm belief that we should be welcoming regulation into the cryptocommunity, rather than rejecting it. This will help to spur on adoption among mainstream investors and the general public.’