Throughout 2018, most cryptocurrencies were affected by strong volatility, thus leading to reduced investor interest and lower prices. However, the crypto sector is far from being dead, and governments are well-aware of this aspect.

With this in mind, numerous countries have stepped up their regulatory and taxation frameworks for the digital currency market. Recent reports indicate that following public consultation, the U.K Tax Collection Service published their crypto taxation legislation, applicable to private digital asset holders.

According to recent reports, the UK Government alongside with the governments of a few European Union countries are planning to further regulate digital currencies, in order to make sure that they’re not being used for illegal purposes, such as money laundering or illegal/terrorism financing.

The statement was first made by a spokesperson from the UK Treasury, who mentioned that bitcoin and other digital currencies should be regulated, and brought in line with the country’s current legislation on anti-money laundering and counter-terrorism financing policies. According to the spokesperson, ‘We have clear tax rules for people who use cryptocurrencies, and like all tax rules, these are kept under review. We also intend to update regulation to bring virtual currency exchange platforms into anti-money laundering and counter-terrorist financing regulation.’

During the last couple of months, as blockchain technology gained significantly more popularity, governments have also started discussing about blockchain-related regulation. According to recent reports, it seems like the United Kingdom may be the world’s first country to present its regulatory framework for the blockchain network.

It seems like the Fintech Accelerator deployed by the Bank of England is one of the main reasons why this regulation will be put into place, considering the fact that blockchain networks now represent the basis for new innovative financial products and services.

Through time, banks and other financial institutions have taken different approaches when it came down to dealing with the Bitcoin revolution. With this in mind, it seems like the Bank of England will take a different approach: if you can’t beat them, join them.

According to a research paper published this week by the bank, economists working for it have stated that central banks should issue their own digital currency. By using a case study carried out in the US, they concluded that doing so is likely to give national economy a boost of at least 3%, while also offering policy makers the tools needed to handle financial crashes and booms.

During the last couple of years, it was proven that the stability of digital currencies such as Bitcoin can best be analysed during moments of crisis. Due to the fact that the United Kingdom has recently voted to leave the European Union, the British Pound has collapsed in terms of value, thus proving that bitcoin is a safe haven asset.

Economic analysts from all around the world and supporters of the digital currency movement claim that bitcoin represents the ideal form of protection against most of the world’s major economic events, as it is independent from political moves, government regulations and economic crises. This led analysts to compare the currency to gold, thus making a strong statement that bitcoin is in fact, as ‘good as gold’.

Unfortunately, during the last couple of months, cyber-attacks and ransom attempts have become significantly more common, given the raising popularity of bitcoin as a ransomware payment method.

In fact, a study carried out among a number of UK companies has revealed that many of them have begun building a bitcoin reserve meant to pay off cyber-criminals in case their businesses are attacked. To put things better into perspective, according to the numbers that were crushed into place by the Citrix and Censuswide companies, which managed to question a total of 250 UK IT companies and their respective security managers, it seems like 1 in 3 UK IT companies has a bitcoin reserve meant to be used for this purpose.