[2018-03-23]How The UK Plans To Help Bitcoin

[churrosndips]

In a bid to strengthen the regulatory environment for Bitcoin and other cryptocurrencies, the UK has unveiled a new fintech strategy for companies. The strategy will involve the UK setting up a new crypto asset task force, which will help businesses make use of the blockchain technology that is the basis of Bitcoin and other cryptocurrencies.

Speaking of the benefits, the UK Chancellor, Phillip Hammond said;

“A new task force will help the UK to manage the risks around crypto-assets, as well as a harnessing the potential benefits of the underlying technology.”

The task force is being formed from representatives from the Treasury, the Bank of England and the Financial Conduct Authority. Hammond believes that these new measures will position the UK at the heart of the fintech revolution. He said;

“I am committed to helping the sector grow and flourish, and our ambitious sector strategy sets out how we will ensure the UK remains at the cutting edge of the digital revolution.”

On top of this strategy, Hammond also revealed a bridge agreement that will allow UK fintech companies to access Australia’s 24 million people, which will open up a world of possibilities for UK fintech firms who are looking to expand into international waters.

The founder of fintech investor IW Capital, Luke Davis, spoke about this agreement, saying;

“The partnership with Australia, underpinned by the most advanced regulatory partnership that the FCA has ever signed, will connect the UK to a new market of 24 million people. Coming in the same weeks as the UK-China fintech alliance announcement, it is clear that the government is taking the views of the industry seriously.”

The London Stock Exchange released a report that stated the UK was one of the top three global markets for fintech companies, who are wishing to expand internationally. The head of primary markets, Robert Barnes said;

“The cross-border ambitions of innovative fintechs are transforming the global financial services sector. But in order to thrive, these innovators need access to long-term growth capital and a supportive global regulatory environment. The UK offers both.”

This new strategy follows the call for tighter regulations on cryptocurrencies and can be a really positive move for all cryptocurrencies, and in particular Bitcoin.

https://cryptodaily.co.uk/2018/03/uk-plans-help-bitcoin/

[DooMAD]

Given that Hammond's party have announced some pretty clueless initiatives in the past related to encryption/cryptography, I'm going to try my best to reserve judgement until this "task force" is in place and making their recommendations, but my gut feeling is I'm not going to be impressed.  If it turns out to be nothing more than a bunch of people who only understand fiat, trying to apply a fiat-mentality in places where it clearly won't fit very well, there's not really much point in having a "task force" at all.  These people being sourced from the BoE, FCA and Treasury need to have some relevant knowledge and experience before they go making any judgements about something they're likely not qualified to make judgements on.  It doesn't "help" Bitcoin if it's merely the blind leading the blind.

[seven7seven]

I love that UK is spreading positive news about crypto. Heard that they are going to launch the biggest mining farm, now they're concerned about this. Awesome

[Qartersa]

Sounds really positive. But I have yet to see how helpful this is in terms of the price of Bitcoin. You know, surely there are good effects of regulation because its price will stabilize but then, what would be the edge of cryptocurrencies in this case? Mind you, the reason people are into Bitcoin is because it has a strong potential of multiplying investments in a short span of time, unlike that of what banks do with traditional fiat currencies. If there is regulation, the price of Bitcoin will somehow attain stability and will be similar to that of traditional fiat currencies that are slow to grow.

[RamonBTC]

Nice that UK is regulating the risk than close it for not understanding the totality of bitcoin and its benefits in terms of globally faster transactions without too much documentation to process. It’s a double blended swords that will help each for the chance to work in hand with bitcoin and government. Regulation is good when the reason doing so is genuine.

[leea-1334]

UK has never been unfriendly towards Bitcoin, even making it easy for tax purposes (you only pay tax when converting to fiat) and they have had a history of being open so this is probably expected. UK also has a lot of challenger banks coming up with their own crypto solutions, I feel the government must be saying to themselves: either we get part of this or we lose out. Now with Brexit, they have no choice but to become creative and innovative financially.

[Guardian.P]

(you only pay tax when converting to fiat)

Why do they have to pay tax for conversion? Convert any other currency, too, you have to pay tax? dollar convert to euro and back, what will it turn out? Why such discrimination bitcoin. Some people do not recognize bitcoin, so it's their personal problems, there are people who like to use bitcoin more, 2 people who use it among themselves agree on this, then a third person comes in and says you can not do this that the first person gave bitcoin for money of the second person. you must give a third person?

[DooMAD]

(you only pay tax when converting to fiat)

Why do they have to pay tax for conversion? Convert any other currency, too, you have to pay tax? dollar convert to euro and back, what will it turn out? Why such discrimination bitcoin.

You pay tax on any profit you make.  It's not the same as a conversion fee.  If you bought some bitcoins a while back at £500, then sold at £5500 for fiat, you'll obviously have to pay tax on the £5000 profit.  You probably wouldn't make that kind of profit trading fiat currencies, Sterling for Euros, etc, but if you did, you'd still have to pay tax on any profits for that too.  There's no discrimination against Bitcoin in that regard.  You wouldn't have to pay any tax if you managed to lose money on your trade, though.

[Zicadis]

Just hope this task force isn't just a group of people in it for the pay cheque because to under cryptos you need to live the experience which is exactly what these guys needs...

Hope more good news will continue coming from the Uk, take the lead guys

[gentlemand]

UK has never been unfriendly towards Bitcoin, even making it easy for tax purposes (you only pay tax when converting to fiat) and they have had a history of being open so this is probably expected. UK also has a lot of challenger banks coming up with their own crypto solutions, I feel the government must be saying to themselves: either we get part of this or we lose out. Now with Brexit, they have no choice but to become creative and innovative financially.

Consensus seems to be now that crypto to crypto trades are classed as a disposal so they're just as taxable as a fiat conversion. I doubt they're going to care very much as long as you hand over something though.

The most constructive thing the government could have done is ask banks what regulation they require to start playing nice. Barlcays and Coinbase is now rolling so perhaps that'll open the floodgates anyway but the UK has fallen a long way behind because of this banking cold war.

[Gotottack]

Help? Perhaps we can call it a business interest. We should not take things as it is especially when it comes to the concerns of governments in regard any businesses. I see they are trying to take control of Bitcoin, hence, it is taking it very closely to them by saying they plan to "help" Bitcoin. Come to think of it, why would they even want to help Bitcoin? Are they the makers of it? Yes or No, there are definitely benefits to the UK government, thus, they are trying to make it appear that they would want to help Bitcoin. Let us always take matters like these with a grain of salt.

[buwaytress]

(you only pay tax when converting to fiat)

Why do they have to pay tax for conversion? Convert any other currency, too, you have to pay tax? dollar convert to euro and back, what will it turn out? Why such discrimination bitcoin.

You pay tax on any profit you make.  It's not the same as a conversion fee.  If you bought some bitcoins a while back at £500, then sold at £5500 for fiat, you'll obviously have to pay tax on the £5000 profit.  You probably wouldn't make that kind of profit trading fiat currencies, Sterling for Euros, etc, but if you did, you'd still have to pay tax on any profits for that too.  There's no discrimination against Bitcoin in that regard.  You wouldn't have to pay any tax if you managed to lose money on your trade, though.

Exactly. The case, if I'm not mistaken, had a precedent set by some of the casinos accepting Bitcoin for deposits. You could gamble as much as you want, and even withdraw them - but the argument arose when users said winnings are not taxable in the UK (which is correct). However, it was argued back that you had to prove you didn't just buy bitcoin with sterling, deposit into casinos and then withdraw it back and convert.

Anyway, it is the same attitude in most EU nations which don't recognise Bitcoin as currency but as a means of exchange. The law will still have to learn, as launderers look for loopholes. But there is no discrimination against Bitcoin here.

And yes, that's why gamblers should also report their losses as that can be written off against tax.

And on topic, UK is already very blockchain friendly, but as some users in the UK pointed out in some other thread I can't locate, the average user still finds it difficult to obtain crypto. Maybe no longer with crypto-enabled challenger banks, but let's see what this task force comes up with. Don't hold your breath...

[Taki]

I love that UK is spreading positive news about crypto. Heard that they are going to launch the biggest mining farm, now they're concerned about this. Awesome

I guess mining farms are going to be as something normal in the economy of each country. First of all such projects well give more working places and the power that mining farms produce can be use for heating of around small towns or villages, for example.

[gentlemand]

I love that UK is spreading positive news about crypto. Heard that they are going to launch the biggest mining farm, now they're concerned about this. Awesome

I guess mining farms are going to be as something normal in the economy of each country. First of all such projects well give more working places and the power that mining farms produce can be use for heating of around small towns or villages, for example.

Anyone setting up a mining farm in the UK is a complete and utter nutcase doomed to fail. Probably 70-80% of other countries have cheaper power. We're also approaching a power generating squeeze as well so mining will be even less viable or welcome.

[jjacob]

Establishment of a task force is not going to solve anything. We have to see how it acts and whether the measures it takes are really helpful for blockchain companies (remember the impact of BitLicence). They may talk about companies accessing the Australian market from London, but they forget that companies might lose access to the EU market after Brexit.

[Harlot]

I am more interested in how they will do it compared to what will they do with it. Creating a task force which is formed by the Bank of England itself is not a good start, I mean Central Banks from the start doesn't have a good history on siding with Bitcoin. This Task Force should focus on things that will support it instead like establishing rules for companies on how they will accept cryptocurrencies and not about monitoring crypto directly.

[criptogenious]

It’s great that UK is announcing positive opinion about crypto. Surely there are good effects of the regulations UK is going to put because it will influence the price to stay stabilize.

[Loveboard]

In the uk, guns are banned and crypto is accepted with open arms. Meanwhile, in America...

[veleten]

UK has never been unfriendly towards Bitcoin, even making it easy for tax purposes (you only pay tax when converting to fiat) and they have had a history of being open so this is probably expected. UK also has a lot of challenger banks coming up with their own crypto solutions, I feel the government must be saying to themselves: either we get part of this or we lose out. Now with Brexit, they have no choice but to become creative and innovative financially.

this paying tax when converting to fiat thingy,actually,reminded of the "scam" some London currency exchanges were running 
on the unsuspecting tourists awhile ago:almost every single central street exchanger did this-
you want to exchange,say 100$ to 60 pounds,you see the rate,calculate,give them the money
then you get back 3-5% less and the receipt would say "5% tax included" ,fine print,its magic,always read it

as for taxing the cryptocurrencies,they cannot do it before they categorize what are they:money,assets,speculative instruments or anything else
you cannot be taxing something that is not defined by any law

[CryptoBry]

Almost all government initiatives relative to the cryptocurrency have fall short of the expectations primarily because they are not getting people who really understand the ins and out of this new industry. However, this is still something we have to thank for given that many governments in many parts of the worlds are still showing skepticism and even pessimism towards cryptocurrency. No matter how inept maybe, an initiative aiming to help the industry will always be welcome.