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British Bitcoin dealers want government regulators to pay attention

Proponents in the UK hope more guidance from the government will promote growth of the digital currency.


Bitcoin dealers in Britain are hoping the government can help them push the nascent virtual currency into the mainstream.

The Guardian reports that a collection of small banks, finance houses, and Bitcoin companies gathered Wednesday to ask the government to step in and create regulations for the nascent virtual currency.

They also complained to officials that "big banks are blocking the creation of business accounts for money remittances" because of concerns that the digital currency could spur financial crime, according to the article.

Bitcoins are a virtual currency based on complex math problems and exchanged over peer-to-peer networks, and unlike physical money like the dollar or euro, aren't backed by any central financial institution. The currency has been around since 2009, but has recently gotten more attention as new dealers and investors ponder its potential as a legitimate currency.

But without regulations, a user who falls victim to fraud is not protected or compensated. Bitcoin dealers hope more guidance from the government will promote growth.

Early last month, Bitcoin got a jolt of legitimacy when a US federal judge ruled in a fraud case that it is indeed a currency. A week later, the New York State Department of Financial Services subpoenaed several digital currency companies, asking them to turn over information such as money laundering controls, source of funding, and consumer protection practices. In Germany, the country's finance ministry ruled Bitcoin could be used for private transactions.

But while the United States and Germany have introduced a few regulations, there has been no such action taken in the United Kingdom.