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For the past decade, cryptocurrency has continued to gain momentum in the financial markets. This comes as most large investment firms begin to invest more in blue-chip cryptocurrencies like Etherum and Bitcoin.
Most governments, including the UK, have tried to develop policies and regulations on crypto usage due to the increased adoption of crypto from the general public and the corporate world. There are cryptocurrency dispute solicitors in the UK to handle legal issues related to crypto.
In the UK, the HM Revenue and Customs and FCA are the major organizations that deal with cryptocurrency regulations. The two bodies have been more progressive in their view of crypto, the kind of regulations they receive, and the competent crypto tax advice to the general public.
In coming up with the relevant regulations for cryptocurrency, there have been challenges, bringing a lot of confusion to the financial market. It is not that easy for any government to adopt a decentralized currency like crypto, and that means the UK is just on the right track compared to other democratic countries.
The UK government has faced many problems with the adoption of cryptocurrency, or lack of it in that case. The global financial regulation also seems to be affecting the UK government’s decision on the use of cryptocurrency.
The current cryptocurrency regulation in the UK
In 2022, the government of the UK granted the FCA powers to view and supervise the UK business ventures involved in cryptocurrency. This was in a bid to help manage the risk around terrorist financing and money laundering.
Today, any business that operates in the UK and is involved with handling cryptocurrency is therefore required to register with the FCA. A business is also supposed to meet all the requirements set out by the Money Laundering Regulations.
The FCA claims only to regulate crypto-assets for money laundering in the case of individuals. It also sets out that in cases where losses are made due to loss in private key, the FCA has the right to step in. However, some utility coins like Ethereum and exchange coins like Bitcoin are out of the FCA scope.
The future of cryptocurrency in the UK
The UK government has not confirmed any legislature for the use of crypto in the short term. While the UK continues to follow the footprints of its neighbors, we are not likely to witness the UK following the advice from other EU countries on the use of crypto, especially after Brexit.
The FCA is also on record admitting that they are only looking forward to putting more regulations on the DeFi world.
The adoption of cryptocurrency in the UK seems to be on the rise. This happens as more and more people learn about the many benefits of crypto on security and privacy. However, we should not sideline the power the UK government has on the use of crypto especially given the many unfair regulations it has put in place.
We are most likely to see great adoption in the DeFi world as investors become more financially independent.
The adoption of crypto in the UK, just like in other countries, will always come with stiff regulation, which will remove many elements of privacy from the crypto sphere.
Final ThoughtsÂ
Yes, cryptocurrency is legal in the UK. However, what seem to be blocking its adoption by most people are the many regulations enforced by the government through the HMRC and FCA. The government and other agencies in the UK are on the move to regulate crypto assets, give investors clarity, and make financial gains in the process.
Most people believe that it’s time the UK adopts cryptocurrency fully. However, it will take some time before the government comes to terms with the changing environment around the currency.
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