On October 29, the UK’s Financial Conduct Authority (FCA) surprisingly announced an immediate ban on the operation of bitcoin ATMs in the country. The FCA cited concerns about money laundering and consumer protection as the major reasons for the controversial decision. This is quite a setback for the crypto currency industry in the country, which has seen rapid growth in recent years. According to the website bank opening times, the UK has over 10,000 bank branches and more than 500 crypto ATMs already installed across the country. The UK was one of the first countries to properly regulate bitcoin, and this move is likely to discourage other countries from embracing digital currencies. The future of cryptocurrency remains rather uncertain, but it is clear that government regulation will play a major role in shaping its development.
What does this mean for the future of cryptocurrency?
This decision was made by the British government in an effort to swiftly crack down on money laundering and supposed crime that involves Ethereum and Bitcoin. The ban will go into immediate effect on Jan 1 – 2020. Cryptocurrency exchanges will also have to register with the Financial Conduct Authority (FCA).
This sudden news comes as a surprise to all involved in the cryptocurrency community, as the UK has generally been one of the more welcoming jurisdictions for digital assets. London, in fact, is a hub to a large number of adventurous blockchain startups and bold investors. However, concerns about money laundering and other shady activity associated with Bitcoin have unfortunately led the government to reconsider its position on cryptocurrency ATMs.
Critics of the ban argue that it will only penalise legitimate businesses and discourage future innovation in the space. They point out that there are already KYC/AML requirements in place for Bitcoin ATM operators, so banning them won’t stop criminals from using cash or other means to convert illicit funds into cryptocurrencies. Moreover, they argue that such broad scope legislation will only drive crypto users underground, making it more difficult for law enforcement to track illegal activity.
For starters, it’s important to acknowledge that this ban is only on bitcoin ATMs. People in the United Kingdom(UK) can still legally sell/buy cryptocurrencies on the web. So while the complete ATM ban may be a nuisance for some people, it’s not going to have a major industry wide impact on the overall crypto market in the UK.
That said, there are some concerns about what this ban could mean for the future of cryptocurrency regulation in the UK. Up until now, there hasn’t been much regulation around crypto in the country. But if more countries start banning crypto ATMs, it could lead to more stringent regulations down the line. This could make it harder for people to buy/sell cryptocurrencies, and potentially stifle future innovation in the field.
In any case, the next few weeks will be critical for determining how big of an impact this ATM ban will have on cryptocurrency in Britain – and potentially beyond.