The UK Government has announced plans to regulate digital currencies and apply anti-money laundering laws to digital currency exchanges operating in the country.
In its 2015 Budget, the UK Government said it will work with the British Standards Institution and the digital currency industry to develop voluntary standards for the currencies in order to provide protection to consumers.
The British government not only wants to regulate the crypto currency, but also plans to increase research funding by £10m to support innovation in the sector.
The money will be used to address the research opportunities and challenges before digital currency technology.
The Digital currency research initiative will be done by the Research Councils, Alan Turing Institute and Digital Catapult.
In August 2014, the UK Chancellor of the Exchequer had announced that the government will look at whether digital currencies and associated technologies can be regulated. During the consultation process, the government received 120 responses.
The UK Digital Currency Association (UKDCA), the advocacy group for digital currency and block chain technologies, has welcomed the government’s move to regulate the digital currencies.
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UKDCA board member Paul Gordon said, "Today’s announcement is significant in that it brings bitcoin and other block chain technologies closer to mainstream adoption.
"The UKDCA is pleased that its recommendations have been adopted and will be leading the process with the BSI to develop industry standards".
The advocacy body said that the regulatory clarity and legitimacy to digital currencies and related businesses will make the UK an attractive place for digital currency business.
