UK govt to assess role of digital currencies

<p>Chancellor George Osborne confirmed that the government will assess whether digital currency should be regulated.</p>

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."

Find up to date information on the FTSE 100 and currencies at City Index.

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.