UK Treasury may 'embrace' bitcoin, if only to choke it to death


George Osborne Embraces Bitcoin as London Aims to be Center of Global Financial Technology Revolution

By James Quinn
The Telegraph, London
Wednesday, August 6, 2014

The Chancellor is to launch a review to assess how the UK could become a leading global centre for Bitcoin and other virtual currencies.

George Osborne has instructed Treasury officials to work on a study looking at the benefits and threats of digital currencies, which remain unregulated.

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The study, expected in the autumn, will scope out the potential for cryptocurrencies, and their role in business and society, in the context of the overall financial system.

It is part of a wider push for the UK to become a world leader in financial technology.

To date, the government has remained relatively tight-lipped on crypto-currencies, other than from a tax perspective.

In March, HM Revenue and Customs scrapped plans to charge VAT on the creation of Bitcoin. However VAT is due, at 20 percent, from suppliers of goods or services sold in exchange for any cryptocurrency.

Equally, capital gains tax is due on any profits earned from trading such digital currencies.

The chancellor will make the announcement during a speech at the Innovate Finance conference in London on Wednesday, where he will be joined by the chief executives of companies including Canary Wharf Group and digital money firm Monitise.

"Key to the government's long term economic plan is cementing Britain's position as the centre of global finance," the Chancellor will say.

"It's only by harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we'll ensure Britain's financial sector continues to meet the diverse needs of businesses and consumers, here and around the globe, and create the jobs and growth we all want to see in the future."

News of the Treasury's Bitcoin review came a day after The Telegraph revealed that the ascent of Bitcoin has been halted, with transaction levels falling, and total volumes, in dollar terms, are now back at levels seen in 2012.

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