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UK govt to assess role of digital currencies

Article By: ,  Financial Analyst
August 6, 2014 11:15 AM

The UK government is set to assess whether digital currencies such as Bitcoin need to be regulated.

Chancellor George Osborne explained that ministers will be looking at the role that digital currency plays in the UK and decide whether or not there needs to be more stringent rules around how it is used. The chancellor's words came as the government readies a plan which aims to make the UK the "global centre of financial innovation".

One of the deciding factors within this move is embracing new technology and that could involve the use of Bitcoin over more conventional currencies. Bitcoin has been growing in popularity since it was launched in 2008. The software-based online payment system can be viewed as virtual tokens with each Bitcoin representing a unique online registration number.

They can be generated by solving a difficult mathematical problem with a 64-digit solution, once this is completed then the computer's owner is rewarded with bitcoins. The currency is then sent to a virtual postbox and can be used to purchase certain products. It has been growing rapidly in popularity with a number of London establishments now accepting Bitcoin to pay for goods and services.

Mr Osborne explained that by assessing the role of Bitcoin, the UK could help press on with its plans of becoming a home for innovation and other technological advances. It will put it ahead of other major technological powers across the globe and help to attract more investment and business to British shores.

In a speech, due to be delivered at London's Canary Wharf later today (August 6th), Mr Osborne will say: "Only by harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we'll ensure Britain's financial sector continues to meet the diverse needs of businesses and consumers here and around the globe."

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