The UK Prime Minister and the Chancellor of the Exchequer have stepped forward in proposing regulation of cryptocurrencies, causing the price of Bitcoin to suffer a 10 per cent fall.
Theresa May took aim at the criminal use of cryptocurrencies, marking this out as an area that the government should be investigating. May made this statement while speaking at the World Economic Forum in Davos.
May said: “I think in areas like cryptocurrencies like Bitcoin we should be looking at these very seriously precisely because of the way they can be used, particularly by criminals.”
While the Prime Minister struck a blow against the misuse of cryptocurrencies generally, Phillip Hammond, the Chancellor, proposed regulation of the trading of Bitcoin specifically. This contributed greatly to driving down the price of the digital currency.
Having already experienced a characteristic price collapse of around 40 per cent, the 10 per cent hit from these announcements left the Bitcoin value at around $10,500. At the end of last year Bitcoin came close to achieving a valuation of $20,000 per BTC.
Although the ubiquitous cryptocurrency bore the brunt of the flak from the announcements, they caused collateral damage across the cryptocurrency space. Other high-profile currencies such as Ethereum also took steep price dips.
Previously proving himself to be an advocate of innovation in spaces like FinTech, Phillip Hammond included his unyielding interest while urging caution.
Hammond said: “I am interested in Bitcoin. The Bank of England, as you know, among the central banks, has been leading on looking at Bitcoin. Look, it is a very interesting, new development. I am – I think we should be cautious about Bitcoin.”
It is unlikely that many truly need to be warned about Bitcoin, with the likes of Stripe also abandoning support for the currency as a means of transaction. The company commented on its limited usefulness for the purpose, while also expressing an ongoing positivity regarding cryptocurrencies.
“What is really important is that in regulating cryptocurrencies, we don’t inadvertently constrain the potential of the technology that underlies it, the blockchain technology, which has a wider and more important application,” Hammond said.