Cryptocurrency

Cryptocurrency Wallet Regulation: 7 Helpful Tips You Should Know

Cryptocurrency Wallet Regulation

As cryptocurrencies spread across the globe, so too do the regulations put in place to try and govern them.

Several laws have been passed or proposed in recent times that have affected cryptocurrencies or blockchain technology.

Crypto traders are probably the most affected by these regulations and in order to turn a profit from trading, they use highly efficient and powerful trading software like Quantum ai to trade bitcoin and other cryptocurrencies.

The crypto world is constantly evolving and keeping up to date with the regulations in different territories is not an easy thing to do.

So, to help you navigate the various legislative positions towards cryptocurrencies, and the activities associated with them, we have put together this guide on the approach the UK use to regulate cryptocurrencies and exchange 

The Current UK Regulations That Impact Crypto

The United Kingdom’s approach to cryptocurrency regulations has matured in its post-Brexit financial landscape. Although the UK confirmed in 2020 that crypto assets are property, it has no specific cryptocurrency laws and cryptocurrencies are not considered legal tender.  

According to the Bank of England, cryptocurrencies lack classical definitional characteristics; hence, they are not considered ‘money’ and do not pose a systemic risk to the stability of the banking ecosystem.

However, the FCA and the Bank of England have issued a range of warnings and guidance about their use.

These warnings question the absence of regulatory and monetary protection, the status of cryptocurrencies as stores of value, and on the dangers of speculative trading and volatility. 

Thus, the UK government were prompted to create a dedicated task force in 2018; this action was initiated due to the regulatory uncertainty associated with cryptocurrencies.

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The task force defined three types of cryptocurrencies and three ways in which crypto assets are used – before setting out a requirement for additional AML/CFT and taxation considerations. 

They concluded that gains or losses on cryptocurrencies are subject to capital gains tax.

Exchange

Exchanges have registration requirements in the UK. The UK previously transposed the cryptocurrency regulation requirements set out in 5AMLD and 6AMLD into domestic law. 

From January 10th 2021, all UK crypto asset firms, including recognized cryptocurrency exchanges, advisers, investment managers, and professionals; that have a brand, a  market product in the UK, and provide services to UK resident clients, must register with the Financial Conduct Authority (FCA). 

These groups must comply with AML/CFT reporting and customer protection obligations. FCA guidance stresses that entities engaging in activities involving crypto assets must also comply with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs). 

Amendments to those regulations came into force in January 2020 and incorporate the latest FATF guidelines.

In essence, Cryptocurrencies: Not legal tender

Cryptocurrency Exchanges: Legal, Registration Requirements with FCA

7 Helpful Tips You Should Know.

Cryptocurrencies have long been discussed and debated, and even with the regulations placed on them, they are still going strong.

Cryptocurrencies have the potential to enable social and economic growth in the UK as well as other countries, by offering easier access to capital and financial services.

Here are 7 helpful tips you should know about cryptocurrency.

1.  A Beneficial Rise in Economic Activities

The rate at which the cryptocurrency industry is growing is ground-breaking and this can be confirmed by early adopters that found opportunities to grow financially. Bitcoin, the most famous of these cryptocurrencies, has already permitted many people and companies to develop and flourish, while many also rely on trading as their source of income. The economy is slowly relying on this industry and cryptocurrencies have a great potential in satisfying them.

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2.  Great Opportunities for Poorly Banked Countries

Cryptocurrencies thrive with their high volatility and ease of use, irrespective of the circumstances.

There are apps that facilitate the use of cryptocurrencies and bring them closer to a wider audience. An added benefit of cryptocurrency use is that it’s completely decentralized, so trading can be done freely across borders. The use of technology will facilitate a financial revolution that will leave everyone more financially connected, empowered and enabled.

3.  Low Transaction Costs

Cryptocurrencies and blockchain don’t need an actual building to exist, the costs associated with their transactions are minute. It has no need for employee wages, utility bills or rent to be paid, so these savings naturally morph into low transaction fees. The

4.  Increased Transparency of Transactions

The blockchain and cryptocurrency transactions are automated and digitized, they are all tracked in a distributed ledger. It cannot be manipulated by third parties, which greatly diminishes the risk of fraud and corruption. This means that underdeveloped countries also have a greater chance of improving their economic and social prospects.

5.  More Power to Entrepreneurs

There’s never been a more prosperous time to do business than now. Blockchain technology and cryptocurrency can help entrepreneurs receive payments in diverse currencies.

6. Toppling Traditional Financial Institutions

The world is changing and it’s changing rapidly. The rate at which cryptocurrency is taking over is a clear indicator that traditional financial institutions can no longer keep up with rising financial crisis that desperately needs to be addressed. Also, the world is facing a growing need to tear down borders, in search of a complete social and financial inclusion – this blockchain technology has everything it needs to address such issues.

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7. Secure Investments

It is only a matter of time until cryptocurrency definitively find a way into our lives, shaping them for the better, with economic growth and inclusion in mind. Millions of people will now have the opportunity to invest, send money across borders, save money and start a business thanks to the amazing possibilities that cryptocurrency bring to the table.

How will New Regulations Change Cryptocurrencies?

Digital currency was borne of the desire for there to be assets untethered from governments and central banks. No one knows what will happen to it when that structure changes.

Many believe new regulations could help cryptocurrencies become a bigger part of our daily lives. They believe that having these regulations is what will give the people still on the sidelines, that push needed to join crypto.

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