Cryptocurrency has been taking the world by storm since Bitcoin was first invented in 2008. Today, there are so many different cryptocurrencies and so many vendors, outlets and businesses who are willing to accept them as payment that regulation has become a necessity.

Unlike traditional currencies, cryptocurrencies are not aligned with any particular country, so new regulations are being devised that account for their international nature. These regulations generally seek to control crypto trading, protect individual economies, and sometimes even outlaw their use altogether.

Prevalence of Crypto

As they are not technically considered legal tender by the UK government, Bitcoin, Ethereum, and other companies that accept cryptocurrencies are in a limited number, but the list is steadily growing. Recently, several massive UK industries have begun to accept payments in these forms, including those in the following sectors:

• Security: Such as VPN providers and antivirus software companies.
• Technology: Including both retailers and service providers.
• Travel: Hotels, flights, tickets, tours and more.
• Retail: including department stores as well as high street retailers.
• E-commerce: For example, online versions of high street shops and specialist sellers.
• Crowdfunding: Kickstarter is making investments of its own in crypto.
• Charity: Many charitable organisations worldwide accept crypto donations.
• Restaurants: Including high street fast food franchise takeaway restaurants.
• Gambling: Online casino operators.

Case of Cryptocurrency and Online Casinos

In the case of the latter, some have claimed that trading in crypto is a form of gambling in itself. While the UK Gambling Commission may have reservations about crypto, some operators have elected to embrace what are tentatively being referred to by authorities as “crypto-assets”.

Some casino operators, including partners of Slotozilla, which helps prospective players to find the best deals and casinos for them, now allow visitors to claim bonuses using crypto, which in turn grants them free slots and other casino bonuses. Slotozilla was founded almost a decade ago by a number of gambling enthusiasts and developers with the goal of bringing casino bonuses, helpful educational articles, and honest reviews to the masses. Today, it is partnered with many of the UK’s biggest casinos.

The option of wagering with Bitcoin and its counterparts is an increasingly popular one, with studies finding that 17% of UK players considered betting with crypto in 2021-2022. Bets made with crypto doubled between the first and second quarters of 2022, illustrating a substantial surge in popularity. Slotozilla’s offerings have managed to reflect this tidal shift, offering dedicated pages recommending Bitcoin casinos and explanations of how the popular blockchain-based currency actually works.

Despite the above list, cryptocurrencies are still only accepted by a relatively small proportion of businesses, as many still feel that trading in Bitcoin is unsafe, largely because of its volatility, associations with illegitimate trading, and lack of regulations in most countries.

Why Are Regulations Needed?

Because of the fact that cryptocurrencies aren’t tied to any specific government, they function on an international level. This provides the opportunity for tax evasion, amongst other illegal activities, such as trading on “dark web” market sites. These factors, in addition to the anonymity they afford, make cryptocurrencies particularly appealing to criminals.

Some of the most common criminal applications of cryptocurrencies include:

• Theft of large amounts of money (including hundreds of millions from various organisations).
• Money laundering (to make ill-begotten cash appear to come from a legitimate or untraceable source).
• Transferring illegal bribery payments to corrupt individuals, protecting their identity.
• Paying for the exchange of illegal black market goods and services (such as drugs or people trafficking).
• Widespread fraud and embezzlement of funds.

According to studies, cryptocurrency-related crimes hit an all-time high in 2021, amounting to some $14 billion worldwide, and the trend has continued upwards since. For this reason, it’s clear that an amount of regulation is necessary.

Current UK Regulations

As the popularity of cryptocurrencies skyrocketed, so did the number of cries for stricter regulations. An amount of UK legislation already exists to protect cryptocurrency users and to curb the rise of crypto-related crime. The Bank of England and HM Treasury are responsible for implementing and enforcing the existing regulations. Some of the main ones include:

A number of additional regulations have been proposed, and these are currently being drafted by the government and financial institutions of Britain. A recent House of Commons report laid out some of the government’s plans for approaching crypto regulations in the future, stating that it wanted to “encourage growth, innovation, and competition in the UK” whilst enabling “consumers to make well-informed decisions, with a clear understanding of the risks involved” and protecting the UK market and economy.

The International Picture

It has been predicted that cryptocurrencies will become mainstream and that they will one day be accepted by a much broader range of companies. For this reason, regulations are being developed by central bank authorities all around the world.

Different countries have chosen to take very different approaches to the regulation of cryptocurrencies. For instance, the US has a forward-thinking approach and is considering its own version of crypto, a “digital dollar”. 

Conversely, other countries, including China and Saudi Arabia, have gone so far as to make trading in all types of crypto illegal altogether. The precise future of regulation in the UK remains unknown. 

MiCA (Markets in Crypto-Assets Regulation)

In September 2020, the European Commission suggested the formation of MiCA, a framework designed to protect consumers, establish clear international laws, and which would be responsible for the granting of international crypto trade licences to companies within the EU.

The main goals of MiCA, which was voted into existence in 2022 and became effective in June 2023, are to protect crypto investors, maintain financial stability, and promote innovation within the crypto industry.

Because of the potential for unregulated trading to damage an economy, it’s likely that other international organisations and alliances will follow suit, forming their own organisations for the regulation of cryptocurrencies, particularly where between-country trading is concerned. These multinational regulatory bodies are a necessary part of the future if the trading of cryptocurrencies is to be embraced.

Conclusion

It’s still early days for cryptocurrencies, and authorities all around the world are still researching them whilst trying to anticipate their evolutions and the impacts they will have on various economic sectors. 

Different countries and states have taken very different approaches to the emergence of blockchain assets, with some having intolerant knee-jerk responses and others allowing trends to emerge before trying to control them. What we can be certain of is that, in the case of these global currencies, regulation will have to be a global effort, and this will surely require international cooperation on a massive scale.