Why is UK so slow to jump on this?

[stereotype]

Wondering what other Brits think about the Bitcoin market in the UK. Specifically, what do you think about not having a professional, fully functioning, recognized Xchange somewhere in the UK, trading high volume GBP/BTC liquidity?

From a forward-thinking, enterprising perspective, im kinda thinking that the usual entrepreneurial Brit with funds, has missed this boat a little. Sure, business opportunities in Bitcoin are going to present themselves, as we go on, but currently, im just bombarded with USD biased experiences/interactions, wherever i navigate. Someone correct me if im wrong, but i don't even think https://bitbargain.co.uk/ is UK owned.

So, any smart UK centric business bods out there, care to share any current projects. Do you need help?
 

Just a thought, and most definitely not a invitation to swap nationalistic nonsense!

[1715323017]

1715323017

[Vladimir]

I guess red tape is too thick. This is why no viable UK based exchange. Treatment of VAT and FSA licensing probably throwing the spanners in the works.

[BlackBison]

Intersango were shaping up to be a strong UK based exchange, but they got scammed by Zhou Tong when they bought Bitcoinica which ruined them financially and also psychologically may have turned them away from Bitcoin as entrepreneurs.

[stereotype]

I guess red tape is too thick. This is why no viable UK based exchange. Treatment of VAT and FSA licensing probably throwing the spanners in the works.

I get that. We certainly tend to build hurdles for ourselves. So i wonder if/how the FSA have been formally approached in some way....yes i watched Bank Of Dave!

[stereotype]

Intersango were shaping up to be a strong UK based exchange, but they got scammed by Zhou Tong when they bought Bitcoinica which ruined them financially and also psychologically may have turned them away from Bitcoin as entrepreneurs.

Get that also. But also with clever marketing, could be a reason to build an attractive place to trade. I remember when Spread betting companies suffered from the scurge of dodgy operations when it all first took off early 00's, but there are very well and respected run UK/Gibraltar companies, operating now.

[BlackBison]

I didn't make my point clear, I was saying that there was a company making some good headway in the UK so I think it can be done. They had some issues with banks I believe, but they probably did not really try and resolve them after they lost faith in the project.

[Anon136]

Wondering what other Brits think about the Bitcoin market in the UK. Specifically, what do you think about not having a professional, fully functioning, recognized Xchange somewhere in the UK, trading high volume GBP/BTC liquidity?

From a forward-thinking, enterprising perspective, im kinda thinking that the usual entrepreneurial Brit with funds, has missed this boat a little. Sure, business opportunities in Bitcoin are going to present themselves, as we go on, but currently, im just bombarded with USD biased experiences/interactions, wherever i navigate. Someone correct me if im wrong, but i don't even think https://bitbargain.co.uk/ is UK owned.

So, any smart UK centric business bods out there, care to share any current projects. Do you need help?
 

Just a thought, and most definitely not a invitation to swap nationalistic nonsense!

Britons are, for what ever reason, particularly indoctrinated. They tend to be more prone to using government to "solve" societal problems (that were caused by government in the first place but thats neither here nor there) and less interested in accepting market based approaches. Britons tend to see the market and government in polarized light of government being the source of all things good and the market being the source of all things bad. Where as Americans see government as a begrudgingly necessary evil, Britons tend see the market as a begrudgingly necessary evil.

anyway i should expect this to cause the UK to be a bit behind the curve in all things bitcoin

[Vladimir]

A company run by bums and ignoring laws can get some headway but yep problems with banks would be the end of it eventually.

A company with proper financial backing that would not want to risk it all and be clearly unlawful would find it too difficult and expensive to run perhaps.

As the result no proper exchange in GBP space.

[stereotype]

Wondering what other Brits think about the Bitcoin market in the UK. Specifically, what do you think about not having a professional, fully functioning, recognized Xchange somewhere in the UK, trading high volume GBP/BTC liquidity?

From a forward-thinking, enterprising perspective, im kinda thinking that the usual entrepreneurial Brit with funds, has missed this boat a little. Sure, business opportunities in Bitcoin are going to present themselves, as we go on, but currently, im just bombarded with USD biased experiences/interactions, wherever i navigate. Someone correct me if im wrong, but i don't even think https://bitbargain.co.uk/ is UK owned.

So, any smart UK centric business bods out there, care to share any current projects. Do you need help?
 

Just a thought, and most definitely not a invitation to swap nationalistic nonsense!

Britons are, for what ever reason, particularly indoctrinated. They tend to be more prone to using government to "solve" societal problems (that were caused by government in the first place but thats neither here nor there) and less interested in accepting market based approaches. Britons tend to see the market and government in polarized light of government being the source of all things good and the market being the source of all things bad. Where as Americans see government as a begrudgingly necessary evil, Britons tend see the market as a begrudgingly necessary evil.

anyway i should expect this to cause the UK to be a bit behind the curve in all things bitcoin

  We are, and have been, for many reasons, been many things Anon   So there could well be, some reality to your words. Can only hope an entrepreneurial, well funded Brit, has just motivated him/herself to prove those words otherwise.

[stereotype]

A company run by bums and ignoring laws can get some headway but yep problems with banks would be the end of it eventually.

A company with proper financial backing that would not want to risk it all and be clearly unlawful would find it too difficult and expensive to run perhaps.

As the result no proper exchange in GBP space.

Its those bloody banks again, eh? We never have been allowed to exercise our 82% right to tell RBS what we want, have we?!

My experience of exchanges, has been trading them Fx/Futures), so can only surmise how much the overheads and start-up costs are. But how much does Gox pull in, at .5% x 1000s daily? Noticed Gox are currently and urgently taking on staff to cope with the huge spike up in account openings. We should be getting some of that market.

[SBC]

Thought I'd weigh in here. Operating in the UK is not easy - at all. There are two main issues here:

The Payment Services Regulations 2009 - the laws the govern most money businesses with the UK (including banks) lay out clear guidance on the requirements of any business operating in this sector. Now here's where it gets tricky. PSR's 2009 apply to businesses which are generally regulated by the UK Financial Services Authority, but the FSA do not officially recognize BTC as a money service operation - so you can't attain regulation even if your entire operation is wholly compliant. This presents a problem; when a bank does business with you and your account is abused (either with or without your knowledge), because you *don't* have an FSA number - the bank's compliance officer is liable. Effectively the bank is required to demonstrate they were not complicit in the illegal activity. Most banks don't want the hassle or the risk and so they will not sign you up.

      In addition to this there is another wonderful set of regulations that apply to any business that could be used for money laundering, funding terrorism or any unlawful activity which derives from the transmission of money; the Money Laundering Regulations 2007. Any business operating in the BTC/GBP space would also needs to put numerous safeguards in place including full auditing, KYC checks, staff training etc to ensure that - if the proverbial fecal matter does hit the fan - they can prove they've done everything reasonably within their power to prevent it happening.

Now, efforts such as Intersango would have succeeded (it was a great exchange) if they had abided by these laws - even if they didn't technically fall under them. Problem was, they didn't. There were no real KYC checks - at least not initially - customers could transfer money from one account and immediately withdraw it through Intersango; causing them to act as a money launderer. In addition; anyone could sign up with almost no information, there were no real transfer limits imposed or other restrictions and of course, as a consequence, they attracted just the sort of individuals that banks cover in red flags and want nothing to do with.

Its an onerous requirement of any business operating in the UK financial space to ask information about the people it does business with. This costs (alot of) money and requires careful thought to system design, process and procedures from the outset. Nobody *wants* to do it, but the law requires that everybody *has* to do it. If you step outside of BTC space for a second, and check out any other money business (1st Contact Forex, Currency Fair, Tradewise etc) - every single one of them is regulated. Every single one of them requires your entire life history before they'll do any business with you - it's the norm. BTC is only the temporary exception and even then - only as a technicality. Unfortunately technicalities won't keep your bank accounts open or your business going.

If you are willing to consider entering the space as a proper business, attempting to dot all the i's and cross all the t's - certainly the opportunity is there. But it's not a Twitter Bootstrap, WordPress weekend job. At least, not if you want to be around in a month.

[Vladimir]

SBC, thank you for such a comprehensive post.

Indeed, back in Jan 2011 I had a great idea to start a UK/GBP exchange, but after a day of research I decided to move on.

[Lethn]

I suppose I could be counted as a 'company' but really I'm just Self-employed/Home Student, I already have the funds I need which are minuscule and I plan on using my art to support my jewellery and vice versa. The UK is in a bit of an odd place right now because there's a lot of anti-EU stuff going on and everyone is of course bickering about the financial crisis and what to do. I don't think it's a matter of red tape or anything, I just think our country had the industrial revolution, is now post-victorian and hasn't gotten out of that stupid rut ever since. It's been that way since Margaret Thatcher and Labour and it's carrying on to David Cameron now as well.

If it's any consolation I'm jumping entirely into Bitcoin precisely because I think this country has just gone to shit and is in a void of nothingness right now, I can't speak for everyone but I do think a lot of people are trying to decide what the fuck to do because the government just isn't interested in doing any governing and seem content on letting everything slide to oblivion. An exchange like MT.GOX but in the UK would be a nice idea but with companies like Bitspend cropping up I'm beginning to think that exchanges will slowly become irrelevant soon, at least for those of us who don't use Bitcoin purely for speculation and profit taking.

Oh and yes, like SBC has said, there's all sorts of shit crazy regulations here, I'm currently going to have to research all of this if I'm going to be able to operate here legally and make money but I guess I'll have to have a word with a financial advisor at some point because some of the stuff will be beyond me because of all the PR and double speak.

Edit: If you want to know just how hard it is to set up anything financial by the way, take a look at the 'Bank of Dave' documentary, should give you a pretty good idea of the kind of crap we have to put up with on a daily basis.

[stereotype]

Thought I'd weigh in here. Operating in the UK is not easy - at all. There are two main issues here:

The Payment Services Regulations 2009 - the laws the govern most money businesses with the UK (including banks) lay out clear guidance on the requirements of any business operating in this sector. Now here's where it gets tricky. PSR's 2009 apply to businesses which are generally regulated by the UK Financial Services Authority, but the FSA do not officially recognize BTC as a money service operation - so you can't attain regulation even if your entire operation is wholly compliant. This presents a problem; when a bank does business with you and your account is abused (either with or without your knowledge), because you *don't* have an FSA number - the bank's compliance officer is liable. Effectively the bank is required to demonstrate they were not complicit in the illegal activity. Most banks don't want the hassle or the risk and so they will not sign you up.

      In addition to this there is another wonderful set of regulations that apply to any business that could be used for money laundering, funding terrorism or any unlawful activity which derives from the transmission of money; the Money Laundering Regulations 2007. Any business operating in the BTC/GBP space would also needs to put numerous safeguards in place including full auditing, KYC checks, staff training etc to ensure that - if the proverbial fecal matter does hit the fan - they can prove they've done everything reasonably within their power to prevent it happening.

Now, efforts such as Intersango would have succeeded (it was a great exchange) if they had abided by these laws - even if they didn't technically fall under them. Problem was, they didn't. There were no real KYC checks - at least not initially - customers could transfer money from one account and immediately withdraw it through Intersango; causing them to act as a money launderer. In addition; anyone could sign up with almost no information, there were no real transfer limits imposed or other restrictions and of course, as a consequence, they attracted just the sort of individuals that banks cover in red flags and want nothing to do with.

Its an onerous requirement of any business operating in the UK financial space to ask information about the people it does business with. This costs (alot of) money and requires careful thought to system design, process and procedures from the outset. Nobody *wants* to do it, but the law requires that everybody *has* to do it. If you step outside of BTC space for a second, and check out any other money business (1st Contact Forex, Currency Fair, Tradewise etc) - every single one of them is regulated. Every single one of them requires your entire life history before they'll do any business with you - it's the norm. BTC is only the temporary exception and even then - only as a technicality. Unfortunately technicalities won't keep your bank accounts open or your business going.

If you are willing to consider entering the space as a proper business, attempting to dot all the i's and cross all the t's - certainly the opportunity is there. But it's not a Twitter Bootstrap, WordPress weekend job. At least, not if you want to be around in a month.

A great insight. Thanks for that.

Is your site http://speedybitcoin.co.uk within the parameters of your noted above requirements? Just trying to judge how far/close away you could be away from operating an exchange, from what you have done so far with speedybit?
BTW, very nice looking site.

[SBC]

Thanks! - We applied for FSA oversight (book of documentation detailing processes, extortionate legal advice which was pretty worthless frankly etc etc) - and as I mentioned above, they (the FSA) wouldn't give it to us only because Bitcoins don't yet fall within the scope of their definition of money - ergo not regulated by them. The registration fee and three months waiting did buy us an official response indicating that no oversight was currently required however, so it wasn't a complete waste of time.

Regarding the second set of regulations; we do fall under the MLR's and that number from HMRC is still pending (bureaucracy at its finest). Our entire business is compliant to the level of a 'Small Payment Institution' - that's why we ask a lot more information than some of our competitors. Again, it's not that we wanted to do - why would any business want to put potential customers through that? - but we we're not likely to be around very long if we don't.

It remains to be seen how the recent recognition of 'Virtual Currencies' in the US plays out over here - the UK (and Europe) tend to tow the 'special relationship' line, so my guess (and it is a guess) is that within the next few months 'guidance' will be issued by Brussels and consequently the FSA/other European Union countries financial regulatory authorities requiring all businesses in this sphere to become compliant. In many ways, this isn't unreasonable - I guess existing companies that currently deal in the money business but not specifically BTC look on and think "Why do I have to be regulated if they don't?" - it kind of levels the playing field a bit.

[garyrowe]

Thanks, SBC for providing a lot of useful information to anyone wanting to set this kind of business up. From the look of it there will be an uphill struggle that puts it out of reach for the average weekend/hobbyist.

So, an alternative strategy could be to create pure BTC-accepting businesses over here. I don't want to blow my own trumpet too much here but I've been trying to get an open source project like this off the ground for a long time now. It's called MultiBit Merchant (yes, it's affiliated with that MultiBit) and you can find more info here: https://github.com/gary-rowe/MultiBitMerchant/wiki/Introduction

The problem I have (and I'm sure I'm not alone here) is that while I am enthusiastic about Bitcoin, I'm limited by my day job to what I can achieve. I've got several Bitcoin projects on the go and I'd like to see this one get more attention from the community. Is there any Java developer out there who would be interested in pushing it along?

For the technically minded, it's Java + Dropwizard + HSQLDB. I'm planning a migration to MongoDB soon.

Even if you're not a developer, do take a look at the Introduction and see if it triggers your imagination to make something happen.

[stereotype]

Thanks! - We applied for FSA oversight (book of documentation detailing processes, extortionate legal advice which was pretty worthless frankly etc etc) - and as I mentioned above, they (the FSA) wouldn't give it to us only because Bitcoins don't yet fall within the scope of their definition of money - ergo not regulated by them. The registration fee and three months waiting did buy us an official response indicating that no oversight was currently required however, so it wasn't a complete waste of time.

Regarding the second set of regulations; we do fall under the MLR's and that number from HMRC is still pending (bureaucracy at its finest). Our entire business is compliant to the level of a 'Small Payment Institution' - that's why we ask a lot more information than some of our competitors. Again, it's not that we wanted to do - why would any business want to put potential customers through that? - but we we're not likely to be around very long if we don't.

It remains to be seen how the recent recognition of 'Virtual Currencies' in the US plays out over here - the UK (and Europe) tend to tow the 'special relationship' line, so my guess (and it is a guess) is that within the next few months 'guidance' will be issued by Brussels and consequently the FSA/other European Union countries financial regulatory authorities requiring all businesses in this sphere to become compliant. In many ways, this isn't unreasonable - I guess existing companies that currently deal in the money business but not specifically BTC look on and think "Why do I have to be regulated if they don't?" - it kind of levels the playing field a bit.

Thats a solid position the FSA are clearly stating there, which is at least something. Also concur with future compliancy. The market cap of BTC is fast approaching 1$B i think, so i guess there is a level where authorities have to implement processes that officially recognize the market. Moreover, when that day comes, is the day Bitcoin grows up.

Re: MLR. Ive seen the level of deposit on your site, and at those levels, an exchange is obviously not viable. I dont however see a problem with asking for ID etc. other than the over-head of doing so. Like i said, it works for spread betting companies, but i guess they have the correct resources. Are you able to indicate the stated max level of transaction/s, that a Small Payment Institution allows you?

Thanks again for you insight. Maybe, just maybe, it might help someone significant see a way forward.

[Lethos]

I came to the same conclusion as already said, with selling and buying bitcoins in the UK.
It is not easy but the problem stems from regulation issues and the few that did got burned by that, or got burned by an insider scamming them.
I opted to go with a European based company (France) - Bitcoin Centeral, so at the least, it would be less of an issue also one to known to have a good reputation and cooperation with their bank. Something which has been an issue for some in the past where the bank renegades on wanting anything to deal with them, so forced them to shut down operations in their country usually.

I do wish there was a few more in the UK, but on the upside there is so many in the uk, it's not difficult to find a private seller/buyer and do trades directly.

[nwbitcoin]

As a UK based bitcoin enthusiast, and someone with a number of years as a business advisor, I have been looking at the UK bitcoin market to find a way to take advantage of the opportunity.

The biggest problem is that the UK is getting very risk averse and so anything which can be regulated, tends to get regulated as soon as someone can lobby for it.  Its getting very expensive to get into any market which involves anything to do with the finance industry. It is possible to start up under the branding of a partner, however, with no such regulations for bitcoin, its a bit of a zombie industry.

I would like to see if its possible to start an exchange based on bitcoin trading being entertainment and gaming, but that then puts you under the gambling regulations, which are possibly even harder to work with!

The main problem with the UK is that it has two masters.  The EU sets its directives, and UK agencies interpret them into laws and policies.  When it comes to business, bosses have to worry about satisfying both the local enforcing agencies as well as national agencies; all of them have to find things to get involve with to justify their funding - allegedly!

Running a business in the UK is hard work!

[stereotype]

I came to the same conclusion as already said, with selling and buying bitcoins in the UK.
It is not easy but the problem stems from regulation issues and the few that did got burned by that, or got burned by an insider scamming them.
I opted to go with a European based company (France) - Bitcoin Centeral, so at the least, it would be less of an issue also one to known to have a good reputation and cooperation with their bank. Something which has been an issue for some in the past where the bank renegades on wanting anything to deal with them, so forced them to shut down operations in their country usually.

I do wish there was a few more in the UK, but on the upside there is so many in the uk, it's not difficult to find a private seller/buyer and do trades directly.

You're right. There are places to privately trade with, if you look, but its not hard to see the premium added to a UK bit, due to the cost of transit (fees/commission/conversion etc). I like many im sure, has opened a Gox account hoping they can buy in the exchange, and sell bits to the UK. Of course that happens, but you really need scale it up to really make it something approaching viable, and as soon as you do that, bells n whistles start to go off at your bank....which brings us back to laundering laws/regs/authorities etc.
So frustrating.

[stereotype]

As a UK based bitcoin enthusiast, and someone with a number of years as a business advisor, I have been looking at the UK bitcoin market to find a way to take advantage of the opportunity.

The biggest problem is that the UK is getting very risk averse and so anything which can be regulated, tends to get regulated as soon as someone can lobby for it.  Its getting very expensive to get into any market which involves anything to do with the finance industry. It is possible to start up under the branding of a partner, however, with no such regulations for bitcoin, its a bit of a zombie industry.

I would like to see if its possible to start an exchange based on bitcoin trading being entertainment and gaming, but that then puts you under the gambling regulations, which are possibly even harder to work with!

The main problem with the UK is that it has two masters.  The EU sets its directives, and UK agencies interpret them into laws and policies.  When it comes to business, bosses have to worry about satisfying both the local enforcing agencies as well as national agencies; all of them have to find things to get involve with to justify their funding - allegedly!

Running a business in the UK is hard work!

Could you create a 'derivative' of a given exchange, that takes the form of a game in some way? Like a 'guess where the market will be in...."?, and sell people 'credits' (btc) to play. So the site starts with a pot in an account, that buys on another exchange when a client wants to 'play'.

Just thinking out loud.

[yucca]

I think once coinlab in US starts running then UK will follow, coinlab is actually going to have insurance for holdings via Lloyds of london, so the city boys know all about it.

[qukkM]

would a UK version of coinlab require the same regulatory approval as an exchange? as I see it coinlab sell you a certain number of BTC at a set price, selling it as a commodity rather than being involved in a currency exchange. It would seem to me that would be much easier to operate as you would essentially be selling virtual goods as opposed to currency trading. I have seen an offer for a uk based site in the marketplace run along similar lines and was considering it's potential.

[stereotype]

I think once coinlab in US starts running then UK will follow, coinlab is actually going to have insurance for holdings via Lloyds of london, so the city boys know all about it.

Sounds positive. Is there a time frame for that?

[stereotype]

would a UK version of coinlab require the same regulatory approval as an exchange? as I see it coinlab sell you a certain number of BTC at a set price, selling it as a commodity rather than being involved in a currency exchange. It would seem to me that would be much easier to operate as you would essentially be selling virtual goods as opposed to currency trading. I have seen an offer for a uk based site in the marketplace run along similar lines and was considering it's potential.

Hmmm. What about selling a blank casacius coin as a commodity, that is loaded by the client to 'play' with. Does that redefine any regulatory requirements, or obviate anything for the better? I guess that question may end up being rhetorical!

[Scott J]

would a UK version of coinlab require the same regulatory approval as an exchange? as I see it coinlab sell you a certain number of BTC at a set price, selling it as a commodity rather than being involved in a currency exchange. It would seem to me that would be much easier to operate as you would essentially be selling virtual goods as opposed to currency trading. I have seen an offer for a uk based site in the marketplace run along similar lines and was considering it's potential.

Hmmm. What about selling a blank casacius coin as a commodity, that is loaded by the client to 'play' with. Does that redefine any regulatory requirements, or obviate anything for the better? I guess that question may end up being rhetorical!

That's an interesting thought - how about a casascius coin that won't be funded until a certain date, that could dodge some regulations?   

[Lethos]

The problem with avoiding the regulation wasn't always with making sure you were doing everything within the law and the related regulations.

It's that because there are still grey areas on how to regulate Bitcoin, in the traditional banking structure, the banks all too often, when faced with them being in trouble, would rather shut you down, than have to deal with the paper work (and investigation) of seeing if you were being compliant. Because proving you were and they ensured you were (which they can't since they don't understand bitcoin), is a problem they don't want to be faced with.

[Nancarrow]

I really liked Intersango. Then one UK bank after another stomped on them! 

There still appears to be a small GBP market on Intersango, but it has absolutely huuuuuge spreads at the mo. And you can withdraw GBP to your own bank account with a bank transfer, but no way to get GBP into Intersango. Either have to use MtGox, or keep hold of my bitcoins.

OTOH: silver lining, it means I have kept hold of my bitcoins over the last year, instead of selling them off in batches to pay off my mining rigs. This has turned out to be an exceedingly good thing! 

[oakpacific]

Good old days of britcoin come back, when I used to be able to credit my exchange account in one day with no fees whatsoever incurred.

[phelix]

Wondering what other Brits think about the Bitcoin market in the UK. Specifically, what do you think about not having a professional, fully functioning, recognized Xchange somewhere in the UK, trading high volume GBP/BTC liquidity?

From a forward-thinking, enterprising perspective, im kinda thinking that the usual entrepreneurial Brit with funds, has missed this boat a little. Sure, business opportunities in Bitcoin are going to present themselves, as we go on, but currently, im just bombarded with USD biased experiences/interactions, wherever i navigate. Someone correct me if im wrong, but i don't even think https://bitbargain.co.uk/ is UK owned.

So, any smart UK centric business bods out there, care to share any current projects. Do you need help?
 

Just a thought, and most definitely not a invitation to swap nationalistic nonsense!

It's the same with Germany. I am not aware of any real exchange with some depth and German language.

[stereotype]

would a UK version of coinlab require the same regulatory approval as an exchange? as I see it coinlab sell you a certain number of BTC at a set price, selling it as a commodity rather than being involved in a currency exchange. It would seem to me that would be much easier to operate as you would essentially be selling virtual goods as opposed to currency trading. I have seen an offer for a uk based site in the marketplace run along similar lines and was considering it's potential.

Hmmm. What about selling a blank casacius coin as a commodity, that is loaded by the client to 'play' with. Does that redefine any regulatory requirements, or obviate anything for the better? I guess that question may end up being rhetorical!

That's an interesting thought - how about a casascius coin that won't be funded until a certain date, that could dodge some regulations?   

The idea is still working for me. How about a 'subscription' to load the pre sent coin?
I am obviously just thinking out loud, so someone please shoot me down, before i convince myself its a go-er!

[nwbitcoin]

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

[stereotype]

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

From what SBC was saying on his insightful post, Bitcoin is currently not recognised as something that needs to be regulated as a currency by the relevant authorities. However, reading between the lines, and sensing how this market is going to develop, its only a matter of short time before that status will change. So yes, re-defining has to be the way to go for the long term. I like the 'us define the position', and we can do that to a certain degree (call it vouchers, credits, collectable coin etc.), but you still have to convince the bank to keep your account open, in the face of doubt and weak or no precedence, in their minds, but Im not hearing a fat lady sing yet, nwbitcoin.

[Pteppic]

I think once coinlab in US starts running then UK will follow, coinlab is actually going to have insurance for holdings via Lloyds of london, so the city boys know all about it.

I would have thought that coinlab got insurance on Lloyds of London because that is just about the only place in the world that would consider providing a high sum assured contract covering Bitcoins.

I also think the UK is suffering due to the hurdle you have to get over just to get involved in Bitcoin. If you can't get bitcoin quickly and easily, it limits the number of people getting involved. Then you get a chicken and egg situation - a well-backed UK exchange that could meet the regulatory burden would probably be successful. But without one, there are not enough UK users to justify setting one up.

[stereotype]

I think once coinlab in US starts running then UK will follow, coinlab is actually going to have insurance for holdings via Lloyds of london, so the city boys know all about it.

I would have thought that coinlab got insurance on Lloyds of London because that is just about the only place in the world that would consider providing a high sum assured contract covering Bitcoins.

I also think the UK is suffering due to the hurdle you have to get over just to get involved in Bitcoin. If you can't get bitcoin quickly and easily, it limits the number of people getting involved. Then you get a chicken and egg situation - a well-backed UK exchange that could meet the regulatory burden would probably be successful. But without one, there are not enough UK users to justify setting one up.

I think one way to get people involved, is to make something attractive. In the context of an exchange, one attractive element is liquidity/participation. The way to create that, is to initially have a prop trader churning over volume. How much cost/risk is implied here, is probably above my pay grade, but i for one, would be very happy to sit and churn required volume all bloody day!

 

[nobbynobbynoob]

I also think the UK is suffering due to the hurdle you have to get over just to get involved in Bitcoin. If you can't get bitcoin quickly and easily, it limits the number of people getting involved. Then you get a chicken and egg situation - a well-backed UK exchange that could meet the regulatory burden would probably be successful. But without one, there are not enough UK users to justify setting one up.

Agreed. Peer-to-peer exchange / LocalBitcoins / Bitcoin-OTC type stuff may have to take up the slack. It may already be doing so, for all we know.

[stereotype]

I also think the UK is suffering due to the hurdle you have to get over just to get involved in Bitcoin. If you can't get bitcoin quickly and easily, it limits the number of people getting involved. Then you get a chicken and egg situation - a well-backed UK exchange that could meet the regulatory burden would probably be successful. But without one, there are not enough UK users to justify setting one up.

Agreed. Peer-to-peer exchange / LocalBitcoins / Bitcoin-OTC type stuff may have to take up the slack. It may already be doing so, for all we know.

Funny you mention that. Martin from   https://bitbargain.co.uk/  has just directed me to something else to consider .... https://bitcointalk.org/index.php?topic=157433.msg1667551

Thanks

[whitenight639]

Britons are, for what ever reason, particularly indoctrinated. They tend to be more prone to using government to "solve" societal problems (that were caused by government in the first place but thats neither here nor there) and less interested in accepting market based approaches. Britons tend to see the market and government in polarized light of government being the source of all things good and the market being the source of all things bad. Where as Americans see government as a begrudgingly necessary evil, Britons tend see the market as a begrudgingly necessary evil.

anyway i should expect this to cause the UK to be a bit behind the curve in all things bitcoin

This ^^


I'm British, I think most of the populace is addicted to Eastenders, it's ok they'll e the first to go hungry when either the euro or the dollar collapses.

The problem is Bitcoins are too hard to understand for most people even with bitcoin.org and the wikis its too much for people, we need to collate the info and dumb it down even more. As for Trading platforms people are just too scared of the risks, nobody wants there front door smashed in by the police for some website exchange that's been misunderstood and is probably costing money to get started.

The big city boys don't care much for regulations they just make up new names for things and do it, ETF, Futures, CDOs it's all bullshit if you had a legal department backing you up like they do you would call bitcoins "Blockchain space" and carry on doing what your doing.

[redbeans2012]

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

Maybe you can just sell bitcoin wallets

[nwbitcoin]

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

Maybe you can just sell bitcoin wallets

The UK public is very, very stupid and scared.  Not sure when it happened, but nobody seems to want to take a risk anymore, unless the government tell them its ok.

It does seem to me that selling bitcoin voucher books in the form of paper wallets would actually have legs.

Its also quite easy to prove that the wallets have credits in them (see what I did there?   with a blockexplorer on your phone

Maybe that is the future for uk bitcoins - under the radar inflation proof internet vouchers that are accepted internationally - and can be sold in a boot sale?!

The return of the green shield stamps ?

[stereotype]

The biggest problem is that this is seen as a financial product or sorts.
If it was a virtual product, like a phone credit, it would not have to go through all these hoops in Europe.

Maybe the real answer is that as users with a drive to make bitcoin work in the UK and the EU, its up to us to define its position, rather than wait for the banks and government to do it for us?

If we are calling it a currency, its financial, and its going to be regulated to death.

If we call it an e-commerce voucher, the cat is still in the bag?

This might have legs?

Maybe you can just sell bitcoin wallets

The UK public is very, very stupid and scared.  Not sure when it happened, but nobody seems to want to take a risk anymore, unless the government tell them its ok.

It does seem to me that selling bitcoin voucher books in the form of paper wallets would actually have legs.

Its also quite easy to prove that the wallets have credits in them (see what I did there?   with a blockexplorer on your phone

Maybe that is the future for uk bitcoins - under the radar inflation proof internet vouchers that are accepted internationally - and can be sold in a boot sale?!

The return of the green shield stamps ?

Wallet option sounds acceptable to. Although when i first read your post, i visualised a high st or market with a 'Bit-Booth' selling vouchers/wallets to Joe Public. Got me thinking now. Are we about to see the sim/contract sellers add Bitcoin to their A boards?

[Ten98]

a well-backed UK exchange that could meet the regulatory burden would probably be successful. But without one, there are not enough UK users to justify setting one up.

Thankfully, you're wrong on the second part.

There are a huge number of UK Bitcoin users, we just buy and sell using MtGox, Virwox, BTC-E and various others. We'd prefer not to have to pay the extortionate transfer fees, and when Intersango still had free deposits via bank transfer, the majority of their deposits came from UK accounts for that reason.

The market is wide open for a decent UK based exchange, and I wish all the luck in the world to SBC.

[Jobe7]

Maybe there's a way to spend your bitcoins as bitcoins that you cba to change back into fiat, in the UK (and later internationally).

Not an exchange, but a way to change your bitcoins into items, that you would normally buy with your fiat..

Avoiding transfer rates, exchange rates, etc,

Turning fiat 'items' into 'bitcoin' items, staying within the bitcoin market (strengthening it), whilst at the same time encouraging retailers to adopt bitcoin.

Reckon bitcoin UK users would be interested in something like this?

[WikileaksDude]

Made this guide: www.bitcoinuk.blogspot.com

So far the cheapest way that I found to buy btc from UK..

Hope it helps.

[bitbadger]

Maybe there's not so much interest in Bitcoin because the City of London being the world's financial capital already has too many other toys to play with.

That said, City forex dealers are missing out on massive profit potential with BTC. What other currency appreciates by 100% in less than a month.

I think it's true the UK banks don't like Bitcoin. Not to mention the government, they never like things or want to support things that they can't control.

I buy from my euro account in Germany via bitcoin24 only 1.24 euro per bank transfer. Unbelievable that the UK banks charge 25 GBP for a SEPA.

What century are they living in. UK banks still issue cheques as well.

[stereotype]

Made this guide: www.bitcoinuk.blogspot.com

So far the cheapest way that I found to buy btc from UK..

Hope it helps.

Thats pretty good Wiki.
 
As a costly example, i sent £500 to Gox via UK bank account. The bank took £22, and Gox sliced another £8, only took 2 full working days, but i obviously wont be doing that again, at that total % rate.

[stereotype]

Maybe there's not so much interest in Bitcoin because the City of London being the world's financial capital already has too many other toys to play with.

That said, City forex dealers are missing out on massive profit potential with BTC. What other currency appreciates by 100% in less than a month.

I think it's true the UK banks don't like Bitcoin. Not to mention the government, they never like things or want to support things that they can't control.

I buy from my euro account in Germany via bitcoin24 only 1.24 euro per bank transfer. Unbelievable that the UK banks charge 25 GBP for a SEPA.

What century are they living in. UK banks still issue cheques as well.

I suspect the City boys n girls, are loving this unregulated, untaxable, unrestrained market. Maybe it suits the suits, as it is.

[Lethos]

We just lost a lot of faith in bitcoin central, with all their downtime to fix mistakes for a security breach.

Guess I'll just stick to local bitcoin trades.

[Gator-hex]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

[bitbadger]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.


But Bitcoin is only a competitor and a threat until the banks embrace and endorse it themselves. Then it becomes a business opportunity.

Like it was with Napster, iTunes  vs HMV, Virgin Megastore and all the rest.

[theta]

Hello to all. I would echo all the wishes for a proper UK based exchange with fast and free GBP transfers back and forth like intersango used to be. A lot of people seem to blame regulations for that, but I would say that regulation in and of itself is not necessarily a bad thing. I would actually feel safer if an FSA regulated BTC exchange came up. Of course this is more costly, so it may be something for the future, if and when volumes (and BTC price) rise to a point where it's worth it for big players to join the game. Until then, I suppose we'll make do with whatever else is out there.

[theta]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.

Not true on either point.

1. Within the UK we have free and instant faster payments. For transfers abroad, given the cost of converting to and from BTC on either end, it's cheaper to use banks and services such as transferwise.

2. Banks do not depend on deposits in order to lend, only on capital. People removing their GBP from their accounts in order to buy BTC does not affect the bank's capital and therefore its capacity to lend at all. People borrowing and lending in BTC p2p market is equally threatening to banks as p2p lending in services such as Zopa, i.e. not much if at all.

[Jobe7]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.

Not true on either point.

1. Within the UK we have free and instant faster payments. For transfers abroad, given the cost of converting to and from BTC on either end, it's cheaper to use banks and services such as transferwise.

2. Banks do not depend on deposits in order to lend, only on capital. People removing their GBP from their accounts in order to buy BTC does not affect the bank's capital and therefore its capacity to lend at all. People borrowing and lending in BTC p2p market is equally threatening to banks as p2p lending in services such as Zopa, i.e. not much if at all.

Utter crap.

Can you please contact Lloyds Tsb and tell them to stop charging me whenever I transfer money to a bank in a different country then? And whilst you're at it, tell them to stop charging businesses (my own included) to stop charging me for using card services (so my customers can use debit/credit cards). And thats 'internal' within the UK. You'll have to get in touch with Natwest and Barclays and Lloyds, and whichever other banks that I don't use.

Because apparently these major banks (and I suspect RBS and Bank of England also) don't realise that according to you its 'free' and 'instant' to use debit/credit cards.

Can you also ask them wtf is up with a debit/credit card charge taking 3-7 days to go through since it's 'instant'.

And .. ye ... IF I'm transferring £1 million into btc, then the 0.6% transfer rate IS gonna be a bit more costly than £10, but if I was transferring £1 mil, tbh, I wouldn't care about a £10 charge ..

On point 2 .. you really think that a bank with 0 capital would not effect their capital and their ability to lend to suckers ..? What planet are you on? Seriously ... trolololol much?

If I had a billion £ in a bank (or 100,000 people took out £1,000) and took it all out to change to btc, you bet your ass they'd notice and it WOULD affect their capital.

To be fair, maybe you just have lack of understanding of economics, either that or you're a blatant troll.

[nwbitcoin]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.

Not true on either point.

1. Within the UK we have free and instant faster payments. For transfers abroad, given the cost of converting to and from BTC on either end, it's cheaper to use banks and services such as transferwise.

2. Banks do not depend on deposits in order to lend, only on capital. People removing their GBP from their accounts in order to buy BTC does not affect the bank's capital and therefore its capacity to lend at all. People borrowing and lending in BTC p2p market is equally threatening to banks as p2p lending in services such as Zopa, i.e. not much if at all.

Utter crap.

Can you please contact Lloyds Tsb and tell them to stop charging me whenever I transfer money to a bank in a different country then? And whilst you're at it, tell them to stop charging businesses (my own included) to stop charging me for using card services (so my customers can use debit/credit cards). And thats 'internal' within the UK. You'll have to get in touch with Natwest and Barclays and Lloyds, and whichever other banks that I don't use.

Because apparently these major banks (and I suspect RBS and Bank of England also) don't realise that according to you its 'free' and 'instant' to use debit/credit cards.

Can you also ask them wtf is up with a debit/credit card charge taking 3-7 days to go through since it's 'instant'.

And .. ye ... IF I'm transferring £1 million into btc, then the 0.6% transfer rate IS gonna be a bit more costly than £10, but if I was transferring £1 mil, tbh, I wouldn't care about a £10 charge ..

On point 2 .. you really think that a bank with 0 capital would not effect their capital and their ability to lend to suckers ..? What planet are you on? Seriously ... trolololol much?

If I had a billion £ in a bank (or 100,000 people took out £1,000) and took it all out to change to btc, you bet your ass they'd notice and it WOULD affect their capital.

To be fair, maybe you just have lack of understanding of economics, either that or you're a blatant troll.

Well said!

The banks in the UK have everyone by the short and curlies. They also have no moral compass in their charging methods, when they see a customer has no choice or when they see that they are losing customers, they have no incentive to 'be nice'.  They will charge for everything they can get away with - and as PPI claims have shown, they will charge for things they can't get away with too!

While I initially wanted to get into bitcoins because I could see me making some money out of it, the more dealings I have had with the financial industry, the more I just want to buy and sell exclusively in alt currencies.

The banks can see this happening too and so we are just going to see them getting even more difficult when it comes to moving from bitcoins to fiat and back again!

Come the revolution etc!

[Jobe7]

Hello to all. I would echo all the wishes for a proper UK based exchange with fast and free GBP transfers back and forth like intersango used to be. A lot of people seem to blame regulations for that, but I would say that regulation in and of itself is not necessarily a bad thing. I would actually feel safer if an FSA regulated BTC exchange came up. Of course this is more costly, so it may be something for the future, if and when volumes (and BTC price) rise to a point where it's worth it for big players to join the game. Until then, I suppose we'll make do with whatever else is out there.

Totally possible under current UK laws.

IF someone with a large amount of btc wished to sell/transfer, then they can as a 'Sole Trader', they do not have to declare anything (as UK does not recognize btc as currency) - UNTIL they transfer the money into fiat, well, which is done straight away as an exchanger.

What you have to declare (and show) is your profit (and how you came about it), when you pass xxx amount you get taxed. You are perfectly entitled to use your own personal bank account as a sole trader.

The trick is - counter balancing profit with expenditure - If you're having just a ton of fiat money show up and you declare it all as profit, then you're gonna get taxed sooner and more rather than later and less.

You counter the profit by stating 'expenditure' - Your expenditure in this case can easily be rental, equipment buying, petrol, lighting (for your own house even), electricity, etc.

Expenditure can even be linear backtraced. Meaning, maybe you borrowed a ton of money, or owe/promised back rent to setup your business (exchanger), and you've promised to pay this off for the next 12 months. Though the best form of expenditure would be in 'buying more stock'.

Seeing as the UK law does not recognise btc atm, it can be considered a commodity.

Now here's where you can 'play the game'.

You transfer enough btc into fiat to enable you to cover all your expenditures, of which the major part should be 'buying more stock', which is really buying more btc.

Most of your actual profit you keep AS btc and spend it as much as possible AS btc (as you probably know, there's many ways to spend btc nowadays). The rest you convert to fiat, buy more btc, pay your bills, and declare what little is left as 'profit' for tax purposes.

Please note: Please do not take my word for gospel because the UK legal system is totally fubard, but if ever anyone was serious in setting this up and wanted advice or pointing in the right direction then feel free to pm me. If I had a vast amount of btc I'd already have set this all up, unfortunately I came late into the btc game (late 2012) and didn't venture much into at the time. You'd need a starting capital, either in fiat or btc, or someone who has the fiat/btc and trusts you, or works with you.

You would be setup as a 'sole trader' who is a 'service provider'.

Enjoy.

[SBC]

An interesting series of videos posted by another individual in another thread: http://www.youtube.com/watch?v=bE8i-4HpKlM (Applies to the UK banking sector)

[theta]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.

Not true on either point.

1. Within the UK we have free and instant faster payments. For transfers abroad, given the cost of converting to and from BTC on either end, it's cheaper to use banks and services such as transferwise.

2. Banks do not depend on deposits in order to lend, only on capital. People removing their GBP from their accounts in order to buy BTC does not affect the bank's capital and therefore its capacity to lend at all. People borrowing and lending in BTC p2p market is equally threatening to banks as p2p lending in services such as Zopa, i.e. not much if at all.

Utter crap.

Can you please contact Lloyds Tsb and tell them to stop charging me whenever I transfer money to a bank in a different country then? And whilst you're at it, tell them to stop charging businesses (my own included) to stop charging me for using card services (so my customers can use debit/credit cards). And thats 'internal' within the UK. You'll have to get in touch with Natwest and Barclays and Lloyds, and whichever other banks that I don't use.

Because apparently these major banks (and I suspect RBS and Bank of England also) don't realise that according to you its 'free' and 'instant' to use debit/credit cards.

Can you also ask them wtf is up with a debit/credit card charge taking 3-7 days to go through since it's 'instant'.

And .. ye ... IF I'm transferring £1 million into btc, then the 0.6% transfer rate IS gonna be a bit more costly than £10, but if I was transferring £1 mil, tbh, I wouldn't care about a £10 charge ..

On point 2 .. you really think that a bank with 0 capital would not effect their capital and their ability to lend to suckers ..? What planet are you on? Seriously ... trolololol much?

If I had a billion £ in a bank (or 100,000 people took out £1,000) and took it all out to change to btc, you bet your ass they'd notice and it WOULD affect their capital.

To be fair, maybe you just have lack of understanding of economics, either that or you're a blatant troll.

It would be nice if you read what I wrote instead of putting words on my mouth.

On point 1, I said it's free and practically instant to use Faster Payments, not debit/credit cards. Isn't this the case?
Debit/credit card usage of course is NOT free, but this is not an apples to apples comparison, as these methods offer a certain degree of protection so it's really a different product. To compare on similar terms, you can set up a system where you accept payments via Faster Payments, then you won't have to pay a fee. As a professional, you can certainly be paid that way, I have paid people like this many times.
For transfers abroad, you can use services as transferwise or similar ones, for a total cost less than the one it currently takes to transfer back and forth between fiat1 -> BTC -> fiat2. I've transferred between GBP, EUR and USD several times paying a total of 0.5% for the FX conversion compared to interbank prices, for example, if GBP=1.5338USD right now, I would pay 10k GBP to get USD 15261 in the US without any other transaction fees. Admittedly, this transfer is not instant, so clearly BTC has an advantage there, but at a significant cost, currently >3% in total to transfer across all the exchanges/currencies (which may be even more costly than doing a wire transfer from a bank). If you use Lloyds (or any other bank) for transfering money to other countries/currencies, you should check the alternatives, and currently the cheapest one is not BTC.
Either way, the original point was about loss of transactions for banks, which doesn't really seem to be the case, as people still use them despite those fees and the abundance of cheaper alternatives (I forgot the mention an even cheaper alternative, Interactive Brokers, where it would cost you practically nothing, maybe 2bps, to transfer between your different currency accounts - of course if you don't use their trading platform it's very costly due to inactivity fees).
It would be very nice to evolve to a point where BTC exchange fees are driven close to zero from increased competition and economies of scale, and then it becomes practically free to move money across countries with BTC, and I certainly hope this will be the case soon. But within the UK for example I can't see why I would prefer it over Faster Payments (same for within the Eurozone for SEPA etc).

On point 2, read again what I wrote. Deposits are not capital, they are liabilities. Withdrawals of deposits reduce the bank's balance sheet, by removing cash from the asset side and deposits from the liability side. They do not reduce the bank's capital, nor its capacity to lend.

And maybe instead of swearing, you should try arguing a little more politely. Just saying.

[stereotype]

MtGox UK bank account was closed with Barclays

Barclays own PingIt

One would suspect they don't want a virtual currency competing with their own.

Absolutely. Bitcoin is a competitor for the banks on at least two fronts:

1. loss of transactions: much faster and cheaper for people to do themselves via Bitcoin.

2. loss of bank balances: since the banks don't offer Bitcoin accounts, they lose out on lending capital as well.

Not true on either point.

1. Within the UK we have free and instant faster payments. For transfers abroad, given the cost of converting to and from BTC on either end, it's cheaper to use banks and services such as transferwise.

2. Banks do not depend on deposits in order to lend, only on capital. People removing their GBP from their accounts in order to buy BTC does not affect the bank's capital and therefore its capacity to lend at all. People borrowing and lending in BTC p2p market is equally threatening to banks as p2p lending in services such as Zopa, i.e. not much if at all.

Utter crap.

Can you please contact Lloyds Tsb and tell them to stop charging me whenever I transfer money to a bank in a different country then? And whilst you're at it, tell them to stop charging businesses (my own included) to stop charging me for using card services (so my customers can use debit/credit cards). And thats 'internal' within the UK. You'll have to get in touch with Natwest and Barclays and Lloyds, and whichever other banks that I don't use.

Because apparently these major banks (and I suspect RBS and Bank of England also) don't realise that according to you its 'free' and 'instant' to use debit/credit cards.

Can you also ask them wtf is up with a debit/credit card charge taking 3-7 days to go through since it's 'instant'.

And .. ye ... IF I'm transferring £1 million into btc, then the 0.6% transfer rate IS gonna be a bit more costly than £10, but if I was transferring £1 mil, tbh, I wouldn't care about a £10 charge ..

On point 2 .. you really think that a bank with 0 capital would not effect their capital and their ability to lend to suckers ..? What planet are you on? Seriously ... trolololol much?

If I had a billion £ in a bank (or 100,000 people took out £1,000) and took it all out to change to btc, you bet your ass they'd notice and it WOULD affect their capital.

To be fair, maybe you just have lack of understanding of economics, either that or you're a blatant troll.

It would be nice if you read what I wrote instead of putting words on my mouth.

On point 1, I said it's free and practically instant to use Faster Payments, not debit/credit cards. Isn't this the case?
Debit/credit card usage of course is NOT free, but this is not an apples to apples comparison, as these methods offer a certain degree of protection so it's really a different product. To compare on similar terms, you can set up a system where you accept payments via Faster Payments, then you won't have to pay a fee. As a professional, you can certainly be paid that way, I have paid people like this many times.
For transfers abroad, you can use services as transferwise or similar ones, for a total cost less than the one it currently takes to transfer back and forth between fiat1 -> BTC -> fiat2. I've transferred between GBP, EUR and USD several times paying a total of 0.5% for the FX conversion compared to interbank prices, for example, if GBP=1.5338USD right now, I would pay 10k GBP to get USD 15261 in the US without any other transaction fees. Admittedly, this transfer is not instant, so clearly BTC has an advantage there, but at a significant cost, currently >3% in total to transfer across all the exchanges/currencies (which may be even more costly than doing a wire transfer from a bank). If you use Lloyds (or any other bank) for transfering money to other countries/currencies, you should check the alternatives, and currently the cheapest one is not BTC.
Either way, the original point was about loss of transactions for banks, which doesn't really seem to be the case, as people still use them despite those fees and the abundance of cheaper alternatives (I forgot the mention an even cheaper alternative, Interactive Brokers, where it would cost you practically nothing, maybe 2bps, to transfer between your different currency accounts - of course if you don't use their trading platform it's very costly due to inactivity fees).
It would be very nice to evolve to a point where BTC exchange fees are driven close to zero from increased competition and economies of scale, and then it becomes practically free to move money across countries with BTC, and I certainly hope this will be the case soon. But within the UK for example I can't see why I would prefer it over Faster Payments (same for within the Eurozone for SEPA etc).

On point 2, read again what I wrote. Deposits are not capital, they are liabilities. Withdrawals of deposits reduce the bank's balance sheet, by removing cash from the asset side and deposits from the liability side. They do not reduce the bank's capital, nor its capacity to lend.

And maybe instead of swearing, you should try arguing a little more politely. Just saying.

Observations/experiences look sound, to me.

Interactive Brokers. Forgot about them. They had a complicated fee structure and a basic platform, but they were always the cheapest.

And yes, Transferwise seems to be the route to take. Wikileaksdude's post above links to a 'first trade fee free' (usually 0.5%). 

[nwbitcoin]

For the past week or so I have been going through the OKPay process - this seems to be a good system so far to convert your bitcoins into fiat.

Obviously, its not good as a long term aim, but until I can buy stuff in bitcoins, this is the best option for me!

Next danger is being accused of tax evasion! At least this system has an audit trail so that any accusations can be dealt with quickly!

[stereotype]

Just found this...... http://venetfx.com/ + http://bit4x.com/ which are affiliated.
 
Isnt quite what we are after, as you cant trade bitcoins....you trade with, bitcoins. Progress though, i guess.

[theta]

Just found this...... http://venetfx.com/ + http://bit4x.com/ which are affiliated.
 
Isnt quite what we are after, as you cant trade bitcoins....you trade with, bitcoins. Progress though, i guess.

From a quick look, the first site (VenetFX) is an actual FX trading platform, regulated by the FSA, whereas the second is a separate, non-regulated service, that piggybacks on VenetFX's platform to provide trading on FX pairs (probably with pass-through prices). Accepting only BTC as payments, and counting PnL in BTC, is a way to bypass the requirement for FSA regulation (no need for regulation if you don't take deposits, and because bitcoin is still not recognised as currency in the UK, they are not technically handling clients' money). Personally, if I wanted to trade FX, I would prefer to deal with an FSA regulated platform.

[stereotype]

Just found this...... http://venetfx.com/ + http://bit4x.com/ which are affiliated.
 
Isnt quite what we are after, as you cant trade bitcoins....you trade with, bitcoins. Progress though, i guess.

From a quick look, the first site (VenetFX) is an actual FX trading platform, regulated by the FSA, whereas the second is a separate, non-regulated service, that piggybacks on VenetFX's platform to provide trading on FX pairs (probably with pass-through prices). Accepting only BTC as payments, and counting PnL in BTC, is a way to bypass the requirement for FSA regulation (no need for regulation if you don't take deposits, and because bitcoin is still not recognised as currency in the UK, they are not technically handling clients' money). Personally, if I wanted to trade FX, I would prefer to deal with an FSA regulated platform.

The only advantage as i see it, is the leverage. But then, 95% of FX traders, do not turn a mid-long term profit!

[ItsDom]

Thought I'd go through and summarise some of the stuff said in this thread and add some extra thoughts as to why Bitcoin isn’t as widely traded and accepted in the UK as elsewhere and a bit on places to get bitcoins in the UK.


Legal
Bitcoin is subject to AML/KYC laws. This has caught out a lot of people in the UK. (e.g. http://bitcoinmagazine.com/interview-with-glbses-nefario/ )

On top of that AML/KYC is expensive to do properly and is a very unsure market. Try going to raise some capital from investors for an idea that revolves around a currency which can fluctuate 25% in a day, and could (and has) loose half of it's value in a matter of days and remain below that level for nearly a year.

Most of us here have faith in Bitcoin. But nobody can deny it's risky. There have been a lot of cases of people losing a lot of money with Bitcoin through hacks, market crash and fraud and unfortunately, they're the sort of stories that make the news in the UK. This makes it harder to get the cash required to overcome the AML/KYC hurdles, as well as money for proper legal and financial advice

It's not formally recognised as a currency, but it is recognized as a virtual currency scheme (http://www.ecb.int/pub/pdf/other/virtualcurrencyschemes201210en.pdf) but that comes with very little legislation.

For VAT, someone wrote to HMRC. It may have been in the thread, or another, the tab was still open in my browser and I can’t figure out where I found the link, but here it is (https://www.dropbox.com/s/wmpjyym7xztqygx/IMG_20130324_131647.jpg) suggests that if your turn over is over the VAT limit then you must pay VAT.

In theory, Bitcoin shouldn't be affected by Electronic Money Regulation 2011 (because it's not technically e-money according to EU definition - see ECB document above.) EMR is targeted at emoney issuers, if Bitcoin was covered, I suspect the issuer may technically be Satoshi, since an issuer refers typically to initial distribution (e.g. you local shop isn't a money issuer when they give you change.)

With laws governing money, people really need to NOT take the “shoot first, ask questions later” with regards to applicable laws like a lot of now defunct UK Bitcoin services have. If you make any money with anything, your bank and HMRC will be after you for their cut and ignorance is not an excuse. Services that have done such things like Britcoin/intersango do more harm than good, inconveniencing themselves, their customers and the entire Bitcoin community.

Some other laws related: we are protected by the Fraud Act. If you've been scammed with Bitcoin, there is a law that in theory can be used in court. Fraud Act revolves around "misrepresentation of value." Pick any site handling Bitcoin as your evidence for value.

Also protected (as above) from wallet theft via Computer Misuse Act '98 unless you gave the person permission to use your computer (in which case, you could probably still get them with Fraud.)

Another interesting little law overlooked but worth mentioning: Regulation of Investigatory Powers Act 2000, part III. It’s basically a crypto key disclosure law. The police can legally force you to hand over all your private keys or face 2 years in prison. I don’t think this has been used in a case with Bitcoin yet, but I wouldn’t be surprised to see it happen in the future. This could be used to prove that a person received or sent Bitcoins or effectively steal or recover bitcoins gathered through perceived illegitimate methods.



 Social
bank/government and customer relations
There's a lot of mistrust of the banks right now in UK as well as the rest of the EU. As you're all aware Bitcoin got quite a boost from the Cyprus hoohaa, so lack of faith in UK banking is a good thing for Bitcoin uptake in the UK to some extent.

However, the Banks and Government don’t trust us as customers. Bitcoin makes it very challenging to do tax. Initially most people will say “why is it a problem? Stick it on your tax return and all is good.” With the exception of figuring out how to put it on the tax return, that would be true. However, the problem arises in that the Banks and Government can’t/won’t/don’t trust us to all be honest.

Bitcoin makes doing a tax audit more challenging. E.g. they audit Alice because they believe Alice is not being honest with regards to the value that she holds, specifically the amount of BTC. HMRC (the taxman) can’t just go to the banks and ask for a bank statement of Alice’s BTC because banks don’t have that info. Also, they can’t just ask the bank for a log of all transactions out to an exchange, because that doesn’t account for bitcoin price rises or money paid to them through Bitcoin.

There’s also the argument that “Blockchain is public, go look it up on there” – that again relies on Alice being honest about her keys. They could try getting the keys through RIPA, but it’s not hard for Alice to write down a few private keys with a huge balance in UTXOs and hide it behind some wall paper or something and deny all knowledge.

This point is a little bit void though because one could argue that it’s just as easy to set up off shore bank accounts and hide money there to avoid tax. True, it is, and offshore banks are a massive pain in the ass for govs/banks, so why would they encourage another system that causes the same problems?

(I may generate some hate here, but here goes) This all again comes back to trust. One could say “well they should trust us to be honest with our tax.” Why should the gov/banks trust us to pay our taxes or fees, just look at this thread. There’s a lot of talk about how to wing it to not pay tax. I, like the next person, dislikes paying tax. However, it’s a necessary evil (alright, maybe not in the amounts they charge) and I think morally, if we’ve ever walked on a road, been to a public school, been treated by the NHS etc.etc.etc. then we should all pay at least SOME tax.  However, the tax issue is not really specific to the UK. UK gov apparently needs all the money it can get these days.

In the news
Interest in Bitcoin is definitely going up. The news is featuring it more, particularly BBC, with articles that aren't all bad - although a good portion are related somehow to hacking. (To any non regular BBC-UK news readers, on behalf of the people of the UK, please accept my apologies for the lack of spelling, grammar or fact checking in any of the articles linked to in the link below.):
http://lmgtfy.com/?q=site%3Awww.bbc.co.uk%2Fnews%2F+Bitcoin

Although the general tone is getting more positive, most people were aware of the first few articles about silkroad, mtgox hack, and other hacks. Now, even a good article is probably acknowledged by lots as “oh that currency that got hacked and is used for drugs.” That is changing I think, but it’s a hard image to shake off.


 Spokes people for Bitcoin and its image in the UK
http://www.guardian.co.uk/technology/video/2013/mar/22/bitcoin-currency-video
People like Amir Taaki. As much as I appreciated him when Britcoin was going fine, I don’t think Amir is a suitable public character for Bitcoin in the UK. Videos like the one above mean when people think of Bitcoin, they think of people like Amir.

 Imagine if your bank came out with a promo, and spokesperson lived in a squat, wears a beanie, speaks with AQI, say things like “I had loads of Bitcoin, but I sold them for $100 and I was like ‘woooo!’  then it went up to $30 and I was like ‘fuck they’d be be worth like half a million dollars – but whatever, but it’s not about the money...” and “stopping people taking drugs is like stopping people having sex”  and “I feel responsibility because I have this skill that not many other people have.” Whilst I agree with the sentiment of most of what he’s saying, and his style of dress and presentation is not too dissimilar to my own, I don’t think he presents the right image for larger adoption in the UK. Having Amir do high profile videos in UK news relating to Bitcoin I think is generating an image which is not an image 75%+ of the UK like, agree with or are willing to follow or subscribe to. (Just to clarify, I have no problem with how Amir chooses to live or present himself – I even have some respect for him in some way – I just don’t think it’s the image to help Bitcoin in the UK.)

Similar to what someone said earlier in the thread, people are to some extent indoctrinated in that they haven’t questioned the alternatives to the current system. I’m not sure they’re wanting or willing to either. As a result I think Bitcoin adoption in the UK would be helped if it wasn’t sold as an anarchists wet dream to overthrow the banks, but more as a fast cheap way of sending and receiving money or paying for things, as well as a potential investment opportunity.


usability
Due to the lack of large adoption, there are not many convenient UK based Bitcoin services, very few online wallets or genuine legitimate exchanges or places to buy things. A lot of people aren’t tech savvy and may not inherently trust themselves to look after a single file that maybe worth a lot of money. I think it would help if there were some services or documents targeted specifically at the UK luddite. “Transfer money from your bank to this account, see your bitcoins here” level of simple, non of this “first go download a client, wait for the blockchain to finish synching, go try find an exchange, figure out the niche obscure payment system they accept etc.etc.etc.”

Also, I believe the average Joe likes a lot of features provided by services such as PayPal. I don’t think they want to be under the impression that if they pay for something, they don’t have a bank or similar to complain to if they’re scammed or lose their money. There’s no reason a decent centralised 3rd party system that offers protection such as PayPal couldn’t be setup for Bitcoin. For users of Bitcoin now, that may undermine the point of Bitcoin as a decentralised system with no authority of transactions, but the average UK citizens doesn’t care for that sort of stuff too much right now, they want to know their money is safe, regardless of the own incompetence.


For buying bitcoin
WikileaksDude posted earlier this url which seems really useful – takes 48 hours to get money into Bitstamp, and minimal fees along the way (maybe 1 – 2%):
www.bitcoinuk.blogspot.com

Also:
https://bitbargain.co.uk/
https://localbitcoins.com/

If you’re feeling risky:
http://www.ebay.co.uk

Thanks,
Dom.

Disclaimer: above is largely my own (and others) opinions and observations, not legal advice or even necessarily objective facts.

[MaTachi]

Eh, no stress, right? Don't we expect bitcoin for more than a couple of weeks? All infrastructure won't appear overnight.

[bitbadger]

 Spokes people for Bitcoin and its image in the UK
http://www.guardian.co.uk/technology/video/2013/mar/22/bitcoin-currency-video
People like Amir Taaki. As much as I appreciated him when Britcoin was going fine, I don’t think Amir is a suitable public character for Bitcoin in the UK. Videos like the one above mean when people think of Bitcoin, they think of people like Amir.

 Imagine if your bank came out with a promo, and spokesperson lived in a squat, wears a beanie, speaks with AQI, say things like “I had loads of Bitcoin, but I sold them for $100 and I was like ‘woooo!’  then it went up to $30 and I was like ‘fuck they’d be be worth like half a million dollars – but whatever, but it’s not about the money...” and “stopping people taking drugs is like stopping people having sex”  and “I feel responsibility because I have this skill that not many other people have.” Whilst I agree with the sentiment of most of what he’s saying, and his style of dress and presentation is not too dissimilar to my own, I don’t think he presents the right image for larger adoption in the UK. Having Amir do high profile videos in UK news relating to Bitcoin I think is generating an image which is not an image 75%+ of the UK like, agree with or are willing to follow or subscribe to. (Just to clarify, I have no problem with how Amir chooses to live or present himself – I even have some respect for him in some way – I just don’t think it’s the image to help Bitcoin in the UK.)

Thanks,
Dom.

LOL.  Brilliant post!

I agree also that Amir isn't giving Bitcoin a good run for its money in the public's eye with the way he looks.

Fact is that like it or not, people judge by superficial appearances.  For the average person, they can get the impression that Bitcoin is run from a squat in East London, by dropouts for dropouts.

Im not saying he should wear a suit and tie, just not to look so way out for the cameras, as it freaks out the average joe q. public.

Especially when the subject matter is about money, which involves matters of confidence, reliability, security and so on.

[stereotype]

Ladies and Gentleman. Max has just spoken on twitter....

Max Keiser ‏@maxkeiser

So - pleased to announce that I'm now in discussion re: setting up a UK based exchange (as I've been saying the 'exchange piece' is weak)

[BitBuster]

It will be interesting to see exactly who will be involved and how they will overcome the numerous obstacles described here. Of course, anything with Keiser's name on will be received favourably and may attract more business than the actual offering deserves.

As the noose of legislation (worldwide) tightens, perhaps all the benefits of bitcoin/trading (pseudo-anonimity, portability and circumvention of the state) will be degraded to a point where trading in person and with cold hard cash (until that is taken away too!) is the only useful option?

BB.

[carborundum]

I love to get an exchange up and running here. The technology is reasonably easy, its the legal junk and resistance of the banks.

[tiberiandusk]

For Queen and country.

[bitbadger]

Imagine if your bank came out with a promo, and spokesperson lived in a squat, wears a beanie, speaks with AQI

what is AQI?

[nobbynobbynoob]

Imagine if your bank came out with a promo, and spokesperson lived in a squat, wears a beanie, speaks with AQI

what is AQI?

Frequently raising one's vocal tone at the end of phrases that aren't questions.

[bitbadger]

I thought it might be some Aspergers-something-or-other syndrome!

Accentuated Questioning Intonation perhaps...

[Dewdie]

Australian Question Intonation

http://www.youtube.com/watch?v=OluCvL0lRnI

[Hawker]

The City of London is a huge financial centre with lots of regulations on money laundering.  For better or worse, this won't change anytime soon.

If you set up an exchange and call Bitcoin a currency, you will need to comply with the rules and probably need to hire compliance staff.  

If you set up an exchange and don't call Bitcoin a currency, then its a commodity and you will have to charge 20% VAT on UK sales.

Both are bad options compared to overseas exchanges which don't have the costs of compliance bureaucrats and don't have to charge VAT.

[stereotype]

The City of London is a huge financial centre with lots of regulations on money laundering.  For better or worse, this won't change anytime soon.

If you set up an exchange and call Bitcoin a currency, you will need to comply with the rules and probably need to hire compliance staff.  

If you set up an exchange and don't call Bitcoin a currency, then its a commodity and you will have to charge 20% VAT on UK sales.

Both are bad options compared to overseas exchanges which don't have the costs of compliance bureaucrats and don't have to charge VAT.

Think we may have hit the nail on the head there. Whatever route we take, we need to add the standard rip-off Britain premium!

[nobbynobbynoob]

The City of London is a huge financial centre with lots of regulations on money laundering.  For better or worse, this won't change anytime soon.

If you set up an exchange and call Bitcoin a currency, you will need to comply with the rules and probably need to hire compliance staff.  

If you set up an exchange and don't call Bitcoin a currency, then its a commodity and you will have to charge 20% VAT on UK sales.

Both are bad options compared to overseas exchanges which don't have the costs of compliance bureaucrats and don't have to charge VAT.

Think we may have hit the nail on the head there. Whatever route we take, we need to add the standard rip-off Britain premium!

What Hawker said does make some sense, but Britain isn't the only place with burdensome AML regulations and taxes.

OTC is probably the way forward for now. Bid/ask prices will normally be closer to true "blue market" than the "officially taken" spot price on Gox, which crashes under pressure and is difficult to wire fiat into [at reasonable price and pace].

[Sc@rF@c3]

I think the main problem is we are a small island and a small market.
It would be much better for a European Exchange to include the UK.

Just my thoughts through experience.

[monsterer]

Legal
Bitcoin is subject to AML/KYC laws. This has caught out a lot of people in the UK. (e.g. http://bitcoinmagazine.com/interview-with-glbses-nefario/ )

...

It's not formally recognised as a currency, but it is recognized as a virtual currency scheme (http://www.ecb.int/pub/pdf/other/virtualcurrencyschemes201210en.pdf) but that comes with very little legislation.

So, it's subject to anti-money laundering laws, but isn't money?

[Sc@rF@c3]

@monsterer

Fantastic information, glad I found this thread.

[stereotype]

Legal
Bitcoin is subject to AML/KYC laws. This has caught out a lot of people in the UK. (e.g. http://bitcoinmagazine.com/interview-with-glbses-nefario/ )

...

It's not formally recognised as a currency, but it is recognized as a virtual currency scheme (http://www.ecb.int/pub/pdf/other/virtualcurrencyschemes201210en.pdf) but that comes with very little legislation.

So, it's subject to anti-money laundering laws, but isn't money?

Who would have known 'they' were taking notice of this around 1 year ago. Any significant nodes in Brussels!!?

Cheers monsterer/ItsDom.

[stereotype]

Thought this was a perfect reason to bump  ..... http://www.coindesk.com/hmrc-uk-bitcoin-exchanges-dont-have-to-register-under-money-laundering-regulations/

[dirtscience]

UK has already widely acepted Bitcoin what you talkin about?

[Vinnigar]

UK has already widely acepted Bitcoin what you talkin about?

Can you explain how it is widely accepted?

I am also interested in finding out news of any UK exchanges? Ive been following coindesk now since they first started up and theyr great for up to date news, but im still buying my bitcoins through 'local bitcoins' or 'bittylicious' which is not ideal?

Anyone else get them from anywhere better?

[stereotype]

UK has already widely acepted Bitcoin what you talkin about?

Can you explain how it is widely accepted?

I am also interested in finding out news of any UK exchanges? Ive been following coindesk now since they first started up and theyr great for up to date news, but im still buying my bitcoins through 'local bitcoins' or 'bittylicious' which is not ideal?

Anyone else get them from anywhere better?

A fully functioning UK exchange is not far away now.

There are a few UK based buyers/sellers on these boards Vinnigar, but do your homework, obviously. Alternatively, are there any Bitcoin MeetUps happening near you?

[jago25_98]

Transferwise and CurrencyFair both blocked payments to Bitcoin exchanges, they say due to money laundering alarms at the banks they use.
This further confirms that it's not regulation that's the problem.

 I've read differing opinions on the Bitcoin bank block. Some say the banks are abusing the laundering alarms to stifle bitcoin. Others say that genuinely a Bitcoin exchange looks a lot like moneylaundering so it's no wonder this happens.

 However, Transferwise & CurrencyFair are 2 services that take out that factor of looking like moneylaundering out of the question surely and these were shutdown too? If these services really do take the moneylaundering factor out of the detection algorhythms then that's a smoking gun to show it's banks abusing the moneylaundering laws and putting UK business behind in the Bitcoin revolution.

 The most efficient way to buy is currently Bitbargain, a great site but the spread's a bit fierce - so much so it excludes using Bitcoin for most remittance amounts.

Another way to do it could be using a transfer service and taking your banking abroad. A good example of how regulation drives business away. It's pretty easy to open a bank account abroad - any recommendations for a non UK bank somewhere supported by transferwise that isn't technically already dead?

 I'm NOT condoning this... but what happens if you were to have 2 wholly separate businesses with separate bank accounts - one only buys your coins, the other only sells. Balancing between the 2 is an open market. Using company entities is the time honoured way of skirting taxes and regulations, why not here too? How could price fluctuation risk be reduced?

[jago25_98]

Also,

 why can't normal regulated currency exchange houses such as FairFX or CurrencyFair just add BTC as a new supported currency?

[solex]

Also,
 why can't normal regulated currency exchange houses such as FairFX or CurrencyFair just add BTC as a new supported currency?

Mainstream fx exchangers won't look at a currency which does not have a valid ISO code, which is the main reason I have been pushing XBT for the last 6 months. Fortunately xe.com recognize XBT and Bloomberg are using it internally. Once Bloomberg make their bitcoin page available to all subscribers then there is a real chance that mainstream fx companies will see it as legitimate and start supporting bitcoin.
Max Keiser talked about plans for a London bitcoin exchange, but there doesn't seem to be any news on it.