According to the recent report, the United Kingdom has the highest number of registered online cryptocurrency exchanges. Out of 63 countries, which were a part of the research, the UK was an absolute winner with a total of 43 companies offering cryptocurrency exchange services. The second place belongs to Brazil, which hosts 27 platforms.
What makes the UK so attractive for such ventures? Is there something that makes the country more cryptocurrency-friendly or is it just mere coincidence? Read on!
UK’s regulatory approach to cryptocurrencies
Just like in every other jurisdiction in the world, cryptocurrencies are yet to be fully defined and regulated in the UK. In other words, lawmakers still need to clarify numerous issues regarding cryptocurrencies. However, that doesn’t mean that they lack regulation.
On the contrary, the UK is one of a few countries that are actually doing their best to explore possibilities and resolve challenges in the industry. They are taking various initiatives along the way that should facilitate pretty much everything in the cryptocurrency market.
When creating their regulatory framework, the UK authorities did not really take into account that a new asset class would arise sometime in the future, disrupting and redefining our perception of the market.
Speaking of regulation, there are three legal acts that are relevant to the cryptocurrency sphere in the UK. The first one is called the Financial Services and Markets Act 2000 (or just FSMA). According to this piece of regulation, people may only conduct a regulated activity in the United Kingdom if the authorities allow them to do it.
Two additional regulatory frameworks are also related to cryptocurrencies. These are called Payment Services Regulations 2017 and Electronic Money Regulations 2011. They are actually very relevant when it comes to how English law views cryptocurrencies. If you want to read more about regulations, make sure to check this article by Global Legal Insights in order to find out more about the legal perception of cryptocurrencies in the UK.
What can we conclude from this? Well, it seems that the UK holds a firm ground when it comes to exploring the possibilities and taking initiative to regulate cryptocurrency. Although they still have a long road to travel (pretty much just like every other country right now), they have a positive attitude towards this technology. Most importantly, the lawmakers are doing their best to embrace the technology and further promote it to the residents.
How the Bank of England views cryptocurrencies?
An institution which has affected the overall sentiment towards cryptocurrencies within the country is the Bank of England. They are embracing this innovation and are looking forward to exploring blockchain-powered assets.
According to this article, the Bank doesn’t perceive cryptocurrencies as threatening and doesn’t think they could affect the overall financial stability of the state. However, the officials of this institution warn that the new form of money can pose risks to individual investors, or anyone interested in obtaining this type of digital assets.
So far, one of the best initiatives started by the Bank of England is the creation of the so-called Cryptoasset Taskforce. It focuses on exploring cryptocurrencies and everything related to this technology by working side-by-side with other prestigious financial institutions such as Finacial Conduct Authority and HM Treasury.
Cryptocurrencies and blockchain technology in the UK
Once you take a look at the overall state of affairs in the UK, you’ll notice that it’s swarming with various blockchain startups, crypto-related companies, and more. Ambitious people from fintech are encouraged to start new projects related to blockchain technology and cryptocurrencies. In other words, the community in the UK – particularly in London – is tight-knot.
But, let’s get back to cryptocurrency exchanges. Since there are 43 of them in the UK, some platforms are definitely worth mentioning.
To sum up, what really makes the United Kingdom so attractive for many cryptocurrency exchanges? Well, it’s probably the combination of a positive attitude towards cryptocurrencies with the active community that tries their best to explore all things blockchain. Authorities working hard to regulate the market and facilitate the related processes are the cherry on the (crypto)cake, which currently tastes sweet in the UK.
All of this makes the UK a fertile ground for many innovations in this sphere, and the reason why people who run cryptocurrency exchanges find this country so attractive for running such businesses.