The budget is one of the most important days on the UK political calendar as the Chancellor declares new taxation rules, new financial measures to help grow the economy and sets the public spending levels. It is often held in March and is closely watched due to its potential to affect the wealth of millions of individuals and businesses.
A spokesman for the UK Treasury revealed for CCN that a study was being undertaken, led by the Treasury working together with different government agencies, on Bitcoin’s potential for innovation on financial commerce and Bitcoin’s potential risk. The study will conclude with proposals for the budget of 2015 which the Chancellor is expected to announce in Parliament.
It is likely therefore that next year Bitcoin may be at the front of the Chancellor’s budget announcements on the economy and public spending. It is too early to say what announcements may be made, but they may include measures to help Bitcoin businesses with raising finances, to clarify any regulations that would apply to Bitcoin businesses and to set the general tone of UK’s approach towards bitcoins.
The United Kingdom is seen as one of the friendliest legal jurisdiction for Bitcoin businesses. Following the New York’s highly criticized Bitlicense proposals, the Chancellor announced his support for Bitcoin, stating:
I believe we can make London the Fin Tech capital of the world. It has to be what the City becomes in the future.
The Chancellor is already part of Bitcoin history as the Genesis Block cites a Times article which states:
Chancellor on brink of second bail out for banks.
The Chancellor might also be remembered as the first high ranking government official to purchase bitcoins. All of which might be dwarfed by potentially historical announcements in the budget of 2015.
London is already home to the largest share of Bitcoin businesses in Europe. Venture Capital investment in European companies, with London at its center, has recently increased even more than the investments in American companies in the second quarter. This may be due to a jurisdictional competition between London and New York over hundreds of millions of Bitcoin business investments. London is undoubtedly winning.
As can be seen in our feature in depth article on Bitcoin Taxation, London has by far the friendliest Bitcoin taxation rules. While all English Speaking jurisdictions have classified Bitcoin as property and tax it likewise, London taxes it like currency.
Complaints however have been made over British Banks being aggressive in closing the bank accounts of Bitcoin businesses. The Treasury spokesman stated that they were unable to comment on individual specific cases and suggested that we wait for the budget. However, if the new regulatory measures are favorable to Bitcoin, as seems likely, then any difficulties that Bitcoin businesses may have in accessing accounts is likely to be fully addressed.
As far as the UK government itself is concerned, it has declared its intent to “make the UK the destination of choice for setting up a FinTech company” and, as a new British exchange which claims to be fully FCA regulated launches, as 150 new start-ups back a new manifesto recommending Bitcoin friendly regulations and as the Chancellor declares that: “We stand at the dawn of a new era in banking”, momentum is clearly building and the world may yet see one of the most astute political decisions in a century.