UK Govt has no current plans for deposit protections for consumers holding digital currencies

Maria Nikolova

The Government has no current plans to introduce deposit guarantee protections for consumers holding digital currencies, says Stephen Barclay.

Stephen Barclay, Economic Secretary to the UK Treasury, continues to face an increasing volume of questions with regard to the possible regulation of cryptocurrencies in the UK. The latest questions on this topic concern any protections to be provided to those holding deposits in digital currencies.

In a written answer to a question from Chris Evans, Labour MP, Stephen Barclay explained that:

“The Government has no current plans to introduce deposit guarantee protections for consumers holding digital currencies, but keeps all policy under review”.

He also said that the UK Government does not have any holdings of digital currencies.

Stephen Barclay also commented on a question whether under the Fourth Money Laundering Directive there are minimum transaction thresholds below which customer due diligence is not required for trade and investment in digital currencies.

He said that the European Union’s Fourth Anti Money Laundering Directive was implemented into UK legislation by ‘The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017’, which came in to force in June 2017. Digital currency exchanges are not regulated for the purposes of this Directive, so there is no requirement to undertake Customer Due Diligence for trade and investment in digital currencies at present.

The UK Government has, however, committed to bringing digital currencies into the scope of anti-money laundering and counter terrorist financing (AML/CTF) regulation. Provisional political agreement has recently been reached at EU-level to amend the Fourth Anti Money Laundering Directive to bring digital currency exchange platforms and custodian wallet providers into the AML/CTF regime.

These amendments will require Member States to oblige these entities to conduct customer due diligence when establishing a business relationship, when carrying out occasional transactions of €15,000 or more, when carrying out a transfer of funds exceeding €1,000, where there is a suspicion of money laundering or terrorist financing, and when there are doubts about the veracity or adequacy of previously obtained customer identification data, Stephen Barclay noted.

The latest comments were made shortly after HM Treasury had to respond to enquiries about the consequences for the UK economy in case Bitcoin and its likes fail. Stephen Barclay has explained that “The independent Financial Policy Committee (FPC), established by the Government, aims to ensure the UK financial system is resilient to, and prepared for, the wide range of risks it could face — so that the system could support the real economy, even in difficult conditions”.

Read this next

Fintech, Uncategorized

BitMEX integrates HALO from Solidus Labs for cross-market surveillance

““The recent approval of the Spot Bitcoin ETF has piqued the market’s interest. As a result of price volatility, the trading volumes for crypto derivatives have gone up substantially. HALO, with its advanced technology and crypto-native detection architecture, will enable BitMEX to smoothly and safely scale trade surveillance across its increased trading volumes and provide the necessary safeguards for new product launches.”

Industry News

Horizon Software rebrands to Horizon Trading Solutions

“Horizon Trading Solutions has seen accelerated global growth over the past year to meet the rising demand for our trading solutions and built-for-purpose technology offering. The choice to rebrand represents a key part of this development, while maintaining our heritage and history in the industry.”

Market News

USDJPY has surged to levels last witnessed in 2022. Should we consider opening a short position?

The recent resurgence of the US dollar has propelled USD/JPY to new heights, touching levels not seen since 2022. This surge comes against the backdrop of stable short-term yields and ongoing economic data that fails to signal a significant slowdown, prompting questions about the extent of current monetary easing measures.

Digital Assets

DED Trends on Twitter After Memecoin Snapshot Announcement

Polkadot-backed community coin #DED, made it to the trending charts on X, demonstrating community’s engagement and interest behind the memecoin. 

Digital Assets

BlockDAG Presale Nears $10 Million Amid Toncoin’s Momentum, Green Bitcoin’s Presale, and the Rise of Other Top Cryptos

This article will examine three top trending topics: Toncoin’s potential, Green Bitcoin’s innovative presale, and BlockDAG’s sustainable mining approach. These cryptocurrencies take centre stage for their uniqueness and innovation.

Digital Assets

Coinbase scores minor victory vs SEC, but lawsuit to proceed

A federal judge in Manhattan, U.S. District Judge Katherine Polk Failla, ruled on Wednesday that the U.S. Securities and Exchange Commission’s (SEC) lawsuit against Coinbase can largely proceed.

Web3

COTI Teams Up with Civic for Enhanced Digital Identity Control

СOTI and Civic are teaming up to enhance digital identity security in Web3, aiming to provide users with more control over their digital selves through innovative technology.

Digital Assets

BlockDAG Takes on Chainlink (LINK) Crypto, and RON With DeFi Card and 5000x Profit Potential

Explore BlockDAG’s innovative DeFi card, which transforms cryptocurrency into spendable cash, alongside Chainlink (LINK) crypto and Ronin’s advancements.

Digital Assets

Court finally decides on Sam Bankman-Fried sentence, experts predict 20 years

Sam Bankman-Fried, the former CEO of the now-defunct cryptocurrency exchange FTX, is set to face sentencing on Thursday in a pivotal moment that could see the entrepreneur beginning a lengthy period in federal prison.

<