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Bitcoin companies ask UK gov to introduce regulation for digital currency

Bitcoin companies have asked the UK government to introduce regulation for the digital currency to make business use easier and help promote economic growth, the Guardian reports.

Along with representatives from small banks and finance houses, the companies told civil servants that the big banks are blocking accounts being created for the transfer of Bitcoin due to fear of financial crimes, something that regulation could help with.

Currently Bitcoin is exchanged and traded through complex peer to peer networks - there is no central bank. Whilst Germany and the US have began to introduce some regulation, with a US judge last month ruling that it is a currency, in the UK, Bitcoin is not recognised.

Many banks and authorities are suspicious of the currency due to the open source nature and that transactions can be carried out completely anonymously. In July, Thailand banned the use of Bitcoin in the country.

Due to the lack of a central bank, Bitcoin is very unstable, and subject to extreme swings in value against mainstream currencies. Bitcoins are 'mined' through complex cryptographic systems, the processing of which will end in 2040, when the currency will not be added to further.

Tom Robinson, a developer who is in the process of launching virtual currency exchange BitPrice, was present at the meeting with officials from the Department for Business, Innovation and Skills and other government departments.

He told the Guardian that although the meeting was positive, there is as of yet no set plans for implementing regulation.