Cryptocurrency is a virtual currency or money encrypted to regulate the generation of currency, eliminate counterfeit currency, and secure fund transactions with decentralized operations and based on contracts in which some conditions need to be satisfied for a successful transfer of funds between two parties. Cryptocurrency is more popular day by day. Many websites and smartphone applications are developed based on cryptocurrency to use them in different ways better.
Platforms for buying and selling virtual currency
Developed for easy access to this currency make it more useful than any other alternatives. Some of the alternative terns that describe cryptocurrencies are digital currency, crypto tokens, electronic currency, cyber currency, payment tokens, virtual assets, etc. The usage of the term varies with the country as different countries use a different term for cryptocurrency. In the UK, many people use this currency for their purchasing, transaction, etc.
Using cryptocurrency
Transactions of money and transferring assets on a contract basis become easy. Confidentiality is more as no agency or medium is used during a transaction between two parties, and privacy is maintained on financial history so that it can avoid threats of theft. The transaction fees for using those websites or on the platform or any other external fees due to the third party’s involvement are more in the normal currency system. Some people do more than one transaction per day because of their work purpose or other reason, which leads to an increase in transaction fees, but in the case of crypto, such fees are less comparably.
Technology Adoption
One can easily access such crypto platforms where crypto tractions conduct with viable data connection without any issue. International transactions become easy with using this cryptocurrency as this currency is more adaptable compare with other currencies. Adaptability is needed when doing international transactions or transaction s within the state because different types of cryptocurrencies are available in online platforms and different people use different means for fund transactions.
The benefits of using cryptocurrency are more and anyone can use this currency with basic requirements for these transactions as this currency can be used to buy a product to transfer a large sum of funds between two parties. In this, contracts play an important role in transactions with any third party’s involvement, which makes the transaction more confidential and secured.
Regulation
Policymaking in the United Kingdom is of a reactionary type. Due to the reactionary type of policymaking means that the crypto regime in the United Kingdom is similar to other countries, which could ultimately affect the United Kingdom’s crypto-related businesses
There is no specific law regarding cryptocurrency. It is considered as not legal tender and needs registration for the transaction of cryptocurrencies. HMRC issues tax on cryptocurrency. Some officials saw the demand for this currency and wanted to regulate its flow using some regulation so that no financial threats may occur in a united kingdom.
Prices of cryptocurrencies
The prices are often very volatile, i.e. sometimes high and sometimes low, which cannot be predicted easily. Even though its unstable behavior, its popularity is increasing nowadays in different types of cryptocurrency forms. This currency is not centralized, which can become a problem for the government as no one knows where and why it is conducted. There are different methods or approaches are used to regulate this cryptocurrency. In the United Kingdom, registration is an approach used to regulate the cryptocurrency.
Demand in usage
Due to increased usage of cryptocurrency, “guidance on crypto-assets” is issued by financial conduct authority a few years back to regulate its flow. It also announced that already carrying out business activities in the United Kingdom using cryptocurrency needed FCA registration. And those who wanted to establish and do business activities using cryptocurrency need to register successfully, or else it won’t operate properly.
This registration method helps eliminate money laundering, terrorist financing. Money laundering and other financial threats can be avoided by promoting effective legal, regulated measurements.FCA(financial conduct authority) plays an important role in regulating and overseeing activities regarding cryptocurrency and modified FCA implementation to carry out the purpose of MLR(money laundering regulation).
Money laundering regulation (MLR)
Money laundering regulation (MLR) s reports regarding the crypto-based business are uncertain. Still, the implementation of modified FCA can regulate them, and such businesses follow the guidelines existing in the FCA regulated firm. There are many obligations raised after implementing the FCA amendments, i.e., registration of crypto-related business with FCA. But these reporting obligations are relatively vague even though they are in a wide range.
Crypto-based businesses to register with FCA are a requirement in UK regulations for cryptocurrency, which helps its country regulate the currency in the right way.
Guidance in FCA on crypto-assets identifies a security token with the third broad category of virtual currencies. Certain attributes are present in security tokens, which help regulate and provide certain rights and obligations comparable to other financial systems for regulating the markets in financial instruments directive or MiFID.
In the United Kingdom, if an as crypto asset looks as it has characteristics as security that comes under the regulation of FCA parameters, it can be regulated or remain an unregulated asset.
Forensic Analysis
legal analysis needs to be done on the crypto exchanges or crypto assets so that one can determine whether that exchange or asset it comes under the security class which can be regulated by FCA
In any case, this analysis is required to come into the security class. Suppose it isn’t legally classified as a security. In that case, it goes to the listing process where tokens are listed, and if there is classified as security classed, then the cautious method is applied. Further shows that the degree of regulation obligations of each token changes with the characteristics the token possess.
A survey on these cryptocurrency transactions is growing fast in the online market, similar to the decentralized technology known as blockchain with inherent encryption. There is still research is going on crypto regulation so that the government can handle it properly. FCS latest research on consumers found that most crypto exchange in the UK tends to use non-UK based exchanges while the report does not directly attribute this to be an ambiguous regulatory position in the United Kingdom
Conclusion
Cryptocurrency becomes a medium for regular transfers of funds between different crypto users, and many trading options are arising due to the increasing popularity of this currency. Many platforms are available online to buy and sell cryptocurrency and convert flat money to cryptocurrency. The main regulation rule in the United Kingdom is to register with FCA before establishing any crypto-based business. This regulation aims to regulate the cryptocurrency flow throughout the country, and amendments are made to FCA to prevent illegal transactions and money laundering. Application and platforms which are used for crypto-based transactions need to be regulated. There is still some part of crypto consider illegal. Many surveys and research are conduction to make better. This regulation approach changes with the country as a different country uses a different approach to regulate it.
