Crypto’s trending in the UK – however, the Central Bank is not happy
According to the Financial Conduct Authority, over 2.3 million Brits hold cryptocurrency assets; this makes up 4.4% of the adult UK population.
The FCA’s research further shows that many investors are acquiring loans to buy crypto, and they estimated around 14% had borrowed money to invest. In addition, the awareness of cryptocurrency has increased from 78% to 82%, meaning more people know of the subject.
However, UK regulators are not very comfortable with these stats and have warned investors about the high volatility risks of crypto investing. Their concern is that individuals are borrowing money to invest in assets they have little knowledge of.
In addition, the regulators are in a battle with Binance, which has applied for an operating license in the UK but failed to comply with anti-money laundering requirements. Binance has since withdrawn its application. The Bank of England has warned crypto investors that they could lose all their money if they ignore these bans.
These crackdowns on Binance have caused frustration among its customers as they could not withdraw funds. In addition, Barclays Bank prevented customers from sending payments to Binance.
The UK has also banned crypto-based derivatives and ETNs in January 2021 as the regulators believe it to be too risky for consumers. BoE Governor Andrew Bailey said Bitcoin has no intrinsic value and is not an efficient way to make transactions. He sees it as a high-risk currency for investors.
The UK to launch its digital currency
The Bank of England and the Treasury are joining forces to explore work on their own official digital currency. This currency would be available for use by businesses and households. The reason behind this is the stability of coins like Tether, which are pegged to the US dollar, which means they are less volatile than regular cryptocurrencies.
The move is to retain consumer’s interest in public money. The decision has not yet been finalized as the BoE investigates the challenges and risks involved and is engaging with the relevant stakeholders.
How to continue trading crypto
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The UK’s not the only country exploring a digital currency, as China is also looking into the same. As traders, it is advisable to equip ourselves with the proper knowledge and be aware of the risks before embarking on this market. When you visit Alphalive’s website, you will be pleased to discover that they offer comprehensive features and support. In addition, they have various policies and risk disclaimers to give that extra feeling of security.