Let’s discuss the reasons for remarkable and stable popularity growth of virtual currencies and why many companies decide to register for working with cryptocurrencies including entrepreneurs in the United Kingdom.
During the global financial crisis, the risks brought by financial intermediaries became more and more evident. This financial period was an initial premise of the bitcoin creation. In order to understand certain properties and possible advantages of virtual currencies, it is recommended to turn to Satoshi Nakamoto’s original document.
It is quite a popular point of view that government or banks are not supposed to have power over virtual currencies. This trend represents the loss of credibility in government institutions. The global financial crisis created a new way to approach the control over currencies.
Virtual currencies
First and foremost, the key initiative of virtual currencies is to avoid entering existing financial system. The reason is the uncertainty of this system prone to instabilities or hyperinflations. This leads to the belief of virtual currencies being a safer alternative to store assets.
Other privileges of virtual currencies include the possibility of quick and less-commissioned international transfers as well as their anonymity since funds do not need to be transferred through bank systems.
Cryptocurrencies regulations in the UK
Momentarily, if one would like to create an ICO in the United Kingdom or enlist their company to work with cryptocurrencies in the UK, their actions will not be regulated by any legislation.
On the one hand, cryptocurrencies are not regulated by any traditional financial instruments such as regulation of securities or payment service providers. The virtual currencies are just so exquisite that existing regimes of financial regulation are not able to incorporate them. However, cryptocurrency operating does not conform to anti-money laundering laws of the UK, and this fact can be unsatisfying for companies focused on running a healthy business.
Recently, it was stated by the British government that it is intended to apply AML policies to virtual currencies and their owners which will constrict cryptocurrency’s freedom. The Bank of England also revealed its plans about launching their own cryptocurrency. These news bring the idea that in the future virtual currencies in Britain may become stronger regulated.
The process of registering a company to work with an ICO in Europe is to be viewed separately in every case as it needs to pass each specific jurisdiction. Even though the European AML regime presents a strict framework for all cryptocurrency transactions and holders in the European Union, it is still not concretely defined what digital currencies are. The point of defining their core specification effects the way of regulating these currencies. So, are they a financial instrument or a payment mechanism?
Taxation issues
Registering a firm for working with digital currencies does not mean evading taxes. Value added taxes are still imposed on the work with ICOs. Just as other currencies, virtual currencies are taxed depending on the intention and nature of financial exchanges. Cryptocurrency holders treat profit or loss from the virtual currency as if it came from other goods or traditional currencies.
Our task in COREDO is to follow meticulously news and trends about virtual currencies. So, if you are interested in launching your own cryptocurrency in the United Kingdom, our specialists are competent to provide you with an individual consultation to answer all your questions and legally support your project.