Central bank of UK crackdown on money laundering through cryptocurrencies

According to a published article in The Independent, the Central bank of U.K. is trying to come down hard on illegal activities involving cryptocurrencies.

According to the governor of the bank of England, Mark Carney, it is necessary to apply more regulations on cryptocurrencies. This is necessary to curb the financial crimes taking place through cryptocurrencies. Currently, many countries suspect that cryptocurrencies are being used for terrorism financing as well as money laundering. This is the reason why most of the countries think that a proper regulatory framework is needed for cryptocurrencies.

According to him, the current lack of regulations pertaining to cryptocurrencies is actually pretty risky. It endangers the economic system as well as the safety of the country.

On the other hand, he is pretty clear that cryptocurrencies are not a threat to the financial system. He, however, believes that if the adoption of cryptocurrencies by retailers as well as small businesses increases, it may pose a systemic risk to the financial system. The reason for this will be the lack of modernization as well as innovation by the financial companies.

On the other hand, the financial regulator of UK thinks otherwise. According to the financial regulator, there is a significant risk which is involved when users invest in cryptocurrencies.

One thing which is pretty clear is that most of the countries are not looking to ban cryptocurrencies. On the other hand, countries are just looking to regulate the cryptocurrency market. With the help of these regulations, the cryptocurrency trading can be made legal. Also, this might lead to a dip in volumes as the illegal activities will be curbed but in the longer term, such regulations are positive. Such regulations will increase the credibility in the cryptocurrency industry. This will automatically help the exchanges in gaining newer and newer users.

When the entire cryptocurrency trading platform is legal, the users will have no hesitation in trading or investing. This is the reason why any kind of regulation will actually help the cryptocurrency market. Also, many of the countries are looking at precedents to create their own regulatory framework. This is the main reason why cryptocurrency users are looking forward to the regulatory framework. With increased participation, not only the cryptocurrency exchanges will benefit but also the current investors in cryptocurrencies will reap the benefits. The demand of cryptocurrencies will also increase further.

With that being said, it remains to be seen how the Central bank of U.K. is able to crack down on money laundering as well as terrorist activities in the cryptocurrency space.

David is passionate about learning cryptography, tech and the Internet. He has years of experience working at international investment projects. Growing interested in Blockchain and cryptocurrencies in late 2015, he joined Smartereum as an editor.

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