Virtual currencies: A bold step into a brave new world or a threat to traditional British currency and financial-crime prevention? That debate continues as the British Bankers Association sent a letter recently detailing its concerns about virtual currencies to the British treasury.
According to Business Insider, The British Bankers’ Association reiterated ongoing concerns related to the anonymity possible with virtual currencies like Bitcoin and the appeal of anonymous financial dealings to criminals, drug traffickers, and terrorist-financing groups.
Traditional-currency financial institutions in many countries abide by highly regulated and detailed requirements for Know Your Customer – Customer Due Diligence, transaction and behavior monitoring, risk ratings, sanctions and negative news screenings, and so on. These regulations, which rely on verified identification details of account holders and close attention to expected behaviors of the account holder, are not yet developed and implemented for much of the virtual-currency world.
British Chancellor of the Exchequer George Osborne has noted on multiple occasions that he would like Britain to be an international leader in the virtual-currency trade and that innovation is essential in Britain maintaining its position as a global financial leader able to meet current and future needs of businesses and individuals.
The British Bankers’ Association is urging that regulations for virtual currencies and for payment service providers handling virtual currencies be well considered and well established among users and providers in order to mitigate the increased risks of money laundering, terrorist financing, and other criminal activity.
