UK hopes to lead world in financial technology so is turning to users of digital currencies for fact-finding mission

The government is asking the bitcoin community for advice on dealing with cryptocurrencies, in an effort to bolster Britain’s lead in the financial technology sector.

The Treasury is asking for information on new digital currencies from the public, law enforcement agencies and financial regulators – but also from so-called “FinTech” firms, which include bitcoin afficionados.

Bitcoin is largely unregulated across the globe, although New York’s department of financial services has suggested creating a “bitlicense” to impose some constraints on the currency.

The Treasury will be looking at examples of regulation in other countries, but emphasises that the lead will come from responses to its own call for information. “Digital currencies and digital currency exchanges are currently unregulated in the UK,” said a Treasury spokesman.

“We’re considering the potential benefits of digital currencies to customers and the technology that underpins them, and whether we should take action to support innovation in this area. We’re also looking at the potential risks, and assessing whether action is required to address any concerns.”

The fact-finding mission follows August’s announcement by chancellor George Osborne that the government intends to focus on cryptocurrencies, and FinTech in general. “It’s only by harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we’ll ensure Britain’s financial sector continues to meet the diverse needs of businesses and consumers, here and around the globe, and create the jobs and growth we all want to see in the future,” the chancellor said at the time.

Jeremy Allaire, founder of Bitcoin bank Circle, says the the early drafts of New York’s license were “over-reaching”, but supports regulation of digital currencies.

“Digital currency firms, especially those that act as custodians of customer digital assets, and those that offer exchange and conversion between local currency and digital currency should be subject to the same rules that apply to existing payment institutions and money transfer businesses in the UK,” he told the Guardian.

