Crypto regulations coming to UK by 2020

Regulation of the UK cryptocurrency market could take two more years to enact, according to corporate law firm Reynolds Porter Chamberlain (RPC).

In a press release, the firm said that a two-year timeframe for passage of legislation on cryptocurrencies was a “best-case scenario,” based on previous financial legislation.

In September, the UK Parliament’s Treasury committee released its report on cryptocurrencies in which it stated that the “Wild West situation” of the industry could not continue. The highly critical report suggested for the Financial Conduct Authority (FCA) to be the regulating body.

RPC said, “Past precedents show it can take years to make relatively minor regulatory changes to the financial regulatory regime. For example, it took two and a half years from the Treasury’s original announcement (10 May 2004) for the regulation of home reversion plans to come in force (6 November 2006).”

According to the firm, HM Treasury would have to assess, “perhaps with market study,” what cryptocurrency-related activities are to be regulated, as well as conduct consultations on proposed draft rules.

“Even if MP’s latest proposals were fast tracked, it could still take years for regulations to cover the UK cryptocurrency market that tread the middle ground between protecting retail participants and allowing the UK’s cryptocurrency market to thrive,” James Kaufmann, RPC legal director, said.

He also expressed concerns that “[b]ringing a complex and fast evolving area like cryptocurrencies into a regulatory framework is going to be a difficult and lengthy process. Added to this, big issues like Brexit are already occupying a lot of regulator’s time.”

Although the Parliament members had tagged the FCA as a regulator, RPC questioned if the agency would have the capacity, funding, and expertise to regulate cryptocurrencies, and be able to prepare for markets’ reaction to the regulations.

The firm added that it agreed with the sentiment of the Treasury committee report on the value of implementing “a workable regulatory regime for cryptocurrencies.” Kaufmann said, “The creation of a cryptocurrency trading hub may also have positive knock-on effects for businesses serving these markets, such as brokers, investment banks, and custodians as well as a potential increase in tax revenues for authorities.”

Even with warnings of cryptocurrency-related investments, the trade is largely uninhibited in the UK. The London Block Exchange (LBX) recently launched a service that would allow storage, transfer, and management of digital assets, initially for traders, investment fund managers,s and companies with initial coin offerings (ICOs).

Furthermore, the use of blockchain technology is also being explored for the management of landlines and the land registry in the UK.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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UK agency studies blockchain use for landlines

The UK’s Office of Communications (Ofcom) announced that it has received £700,000 ($917,000) from the Department for Business, Energy and Industrial Strategy (BEIS) to explore the use of blockchain technology for the management of landline numbers under its jurisdiction.

In its statement, Ofcom said, “Between now and April 2020, we’ll be inviting industry participants to trial the porting and management of millions of telephone numbers using blockchain and ledger technology.”

Hindrances to managing a database for such a purpose were high costs and difficulty in collaborating among parties. Ofcom said, “We have the chance to test the solution before it is rolled out across the industry. We plan to share key learnings, best practices, and the underlying code base, where applicable, with other regulators.” The benefits of the study, it said, would not just be limited to Ofcom’s mandate, due to other participants in the project.

Ofcom Chief Technology Officer Mansoor Hanif said, “We will be working with industry to explore how blockchain could make it quicker and easier for landline customers to switch providers while keeping their number – as well as reducing nuisance calls.”

The agency said that there were about 1 billion landline numbers already in use or reserved, which are issued to telecommunications companies. The challenge, according to Ofcom, was with telco networks moving “from traditional analogue telephone lines to an all-IP (internet protocol) infrastructure.”

Ofcom said that blockchain could help in the process, by facilitating the moving of a number between providers, better handle fraud and nuisance calls, lower costs, and “increased industry agility.”

“Blockchain allows for greater transparency between users and uses underlying open-source software code. It is resilient because the number database can be replicated with each user having a copy. Updates can also be seen in real-time, by all users, but cannot be added to the register,” the agency said.

The BEIS was created in 2016, replacing the Department of Energy and Climate Change, and the Department for Business, Innovation and Skills.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

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UK land registry plans blockchain integration

Her Majesty’s (HM) Land Registry, which holds 25 million land titles in England and Wales, may soon be using blockchain technology to document purchases of real estate.

In a press release, the agency announced its partnership with software company Methods, which will be using the Corda platform for the second phase of the UK government project dubbed Digital Street.

HM Land Registry Chief Executive Graham Farrant said, “Our ambition to become the world’s leading land registry for speed, ease of use and an open approach to data requires HM Land Registry to be at the forefront of global innovation in land registration… [W]e are taking another step toward that goal, as we explore how new technologies like blockchain can help us to develop a faster, simpler and cheaper land registration process.”

Methods CEO Peter Rowlins said, “When we read the HM Land Registry requirement, we recognized that the unique features offered by Corda in terms of security, privacy, interoperability and the smart contract flow framework, originally designed for financial services, would be an excellent fit.”

Methods had already begun using digital technology for a small selection of properties even prior to the blockchain project.

The HM Land Registry estimates that it handles property contracts whose worth totals over £4 trillion ($5.2 trillion), including around £1 trillion ($1.3 trillion) of mortgages, and this represents more than 85% of the land mass of both England and Wales. Digital Street is the agency’s research and development project begun last year, that uses new technologies to improve the process of buying and selling properties.

Corda is an open-source blockchain platform being developed by more than 200 entities from various industries in both private and public sectors. The blockchain has already been applied in financial services, health care, shipping and insurance.

David Rutter, CEO of legal consortium R3 that developed the Corda platform, said, “Blockchain holds the potential to transform land registry services by improving speed, simplicity and efficiency. We will be working closely with HM Land Registry, Methods and our partners over the coming months to turn this potential into reality.”

Blockchain technology has already been tested as a solution for land registry in Brazil, where the agency Cartorio de Registro de Imovies has partnered with Delaware-based Ubitquity.

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