George Osborne, the UK's Chancellor of the Exchequer, has to resolve the problem of getting a bank account in the United Kingdom for Bitcoin-related companies. UK banks are currently refusing BTC businesses to open standard banking accounts. Thus, even if Bitcoin startups have FCA support and are licensed, they are still unable to operate without a traditional bank account. BTC market experts expect George Osborne to act after the announcement to support digital currencies-friendly regulations was made during the Bank of England's Open Forum on November 11.
Tough job
George Basiladze, the CEO of Bitcoin wallet and exchange service Cryptopay.me based in London since 2013, faced a bunch of problems related to Bitcoin regulation in the UK during that time. Here’s what he said to Cointelegraph about the Osbourne’s initiative:
“It’s very nice that Osbourne has mentioned bitcoins in his speech and we appreciate that. However, I do not think that this would result in any material change in current policy."
However, George Basiladze points out that the main problem in the UK is not government regulation, but the failure to get bank accounts:
“You may have a favorable regulations and the FCA may support and license you. But if you cannot get a bank account (just a standard one) you cannot operate. This is easy. Not for BTC companies, though. If you say that you are doing anything connected to bitcoins and bitcoin exchange, you will not get a bank account in the UK. Banks do not like bitcoin companies as they make their compliance department’s head explode.
Companies cannot provide truly innovative solutions with ~ zero fees, because they do not have the means to do that. No bank account is the way to additional fees, bad service and other issues.”
Simon Dixon, CEO of BnkToTheFuture.com and Fund Manager of Bitcoin Capital, also shared his opinion about the problem:
“It is nothing new to hear a government state that they want their country to be the capital for Bitcoin startups. Most governments want the thousands of jobs that will be created from this new sector. However the reality is that regulators are independent of governments and banks have more control than both regulators and governments.”
Michael Terpin, head of BitAngels, who’s spend enough time in London to be familiar with what's going on, commented to Cointelegraph:
“The issue is a power struggle between the politicians (who want to please the electorate and promise growth and prosperity) and the regulators (who want to maintain and build their fiefdoms by adding more regulation). In the middle are the banks, who are able to pressure both the regulators and politicians to protect their interests.”
Michael Terpin gave an example of such a situation last year when the Isle of Man officials made a big deal about how friendly they were going to be to Bitcoin - a Crypto Isle of sorts - but then after holding a conference to bring in major Bitcoin investors and companies, the central bankers and regulators said they still had concerns and fell back on the promise of bringing new business to the Isle of Man.
“It's no surprise that UBS and JP Morgan are sounding the alarm on Bitcoin (while at the same time trying to create their own private blockchains). Having a world power like the UK and one of the world's top financial hubs in London embrace it as an innovation greatly threatens their monopoly over the movement of money. It's like when Western Union said more than 100 years ago that the telephone was of no possible use to anyone,” says Michael Terpin.
George Osborne to support FinTech and cryptocurrencies
George Osborne announced yesterday that he wants to make London a world leader in FinTech and cryptocurrencies. Osborne is going to make some changes to the existing regulations in the industry. Thus, changing the rules will influence greater innovation among the London Bitcoin community.
George Osbourne is a well-known Bitcoin supporter. He realizes the meaning of cryptocurrencies for the development of the whole FinTech sector. That’s why he stays supportive of Bitcoin despite other European leaders expressing their skepticism towards it.
In fact, this skepticism could be useful for achieving Osbourne’s goal as he can take advantage of cryptocurrencies for the development of the UK’s FinTech industry, while leaving all other European competitors in the dust. However, he realizes that, to do this, there have to be some regulatory changes. And he promises to deliver those changes.
“Osborne is also promising an innovation-friendly approach to the regulation of new technologies such as cryptocurrencies,” states Finextra.
The changes will surely have a great influence on FinTech and cryptocurrency, making them, perhaps, more convenient and customer-friendly.