Theresa May has spoken at the World Economics Forum in Davos calling for closer scrutiny of the virtual money markets, saying “Cryptocurrencies like Bitcoin, we should be looking at these very seriously, precisely because of the way that they can be used, particularly by criminals.”
The mention of potential cryptocurrency regulation by the Prime Minister will undoubtedly be very unwelcoming news for all those who have invested already, given the volatility of the cryptocurrency market which has been demonstrated in recent weeks – there has already been a dramatic reduction in the value of cryptocurrencies amid fears of a crackdown on the unregulated market.
Already South Korea has announced it will ban the use of anonymous bank accounts in cryptocurrency trading on 30 January. Furthermore, France has already indicated potential tougher new regulations to be enforced on cryptocurrencies to prevent them from being used to avoid taxes or finance terrorism and other criminal activity.
However the more optimistic outlook would suggest that regulation may be a good thing for the cryptocurrency market, investors would likely feel safer putting their money into cryptocurrencies if they knew that it was regulated market. In addition, regulation may perhaps encourage the wider use of cryptocurrency for day to day spending. It was reported in December last year by The Telegraph that the Bank of England was exploring its own Bitcoin style digital currency, having set up a research unit to look into a possible cryptocurrency linked to Sterling.