UK and EU leaders are planning a crackdown on the Bitcoin amid fears tax evasion and money laundering.
The Treasury hopes to bring transparency to the cryptocurrency. In doing so, traders will be forced to reveal identities and end the anonymity surrounding the currency.
“These new forms of exchange are expanding rapidly and we’ve got to make sure we don’t get left behind – that’s particularly important in terms of money laundering, terrorism or pure theft,” said Labour MP John Mann.
“It would be timely to have a proper look at what this means. It may be that we want speed up our use of these kinds of thing in this country, but that makes it all the more important that we don’t have a regulatory lag.”
Despite a surge in trading and another record high reached on Sunday, Goldmann Sachs boss as accused the currency of being a vehicle to commit fraud and other illegal activities.
Bitcoin hit a high of $11,800 over the weekend. Following news of the crackdown, it slumped to $10,554. Value of the currency has increased by over 1,000 percent over the past year, however, there are warnings of it becoming a bubble.
Last week, a US regulator has allowed CME Group and CBOE Global Markets to list Bitcoins. The creation of a futures market is hoped to soothe current volatility.
Stephen Barclay, the economic secretary to the Treasury, wrote in a Parliamentary answer: “The UK government is currently negotiating amendments to the anti-money laundering directive that will bring virtual currency exchange platforms and custodian wallet providers into anti-money laundering and counter-terrorist financing regulation, which will result in these firms’ activities being overseen by national competent authorities for these areas.
“The government supports the intention behind these amendments. We expect these negotiations to conclude at EU level in late 2017 or early 2018.”