New regulation to be enacted in the UK could see Bitcoin exchanges and related services enjoy access to faster payments and considerably increase liquidity as the United States is also considering similar incentives in an attempt to foster emerging payment systems.
UK removes barriers for emerging players
Legislation published by the Payment Systems Regulator (PSR) requires that “pan GB operators” who are not already subject to specific access requirements to have “objective, risk based and publicly disclosed Access Requirements, which permit fair and open access.”
Access to payment systems has been an issue, which has long dogged Bitcoin operators in the UK, with skittish banking relationships and regulatory uncertainty causing many to move off-shore or secure off-shore banking support.
Although it has been argued that the PSR announcement is an example of “regulation to fight regulation,” the cementing of obligations on the part of Bitcoin exchanges will no doubt be greeted by the industry. Coming off the back of last week’s landmark budget announcement, sentiment regarding the climate for Bitcoin in the UK is once again running high.
The PSR report continues:
“The Access Rule will help ensure that Access Requirements do not unnecessarily or disproportionately restrict direct participation in payment systems and do not act as a barrier to entry and expansion for new and emerging [payment systems providers].”
Equally conspicuous is the reaction of the banking community, which in a report issued Wednesday by the British Bankers Association, voiced its apparent displeasure at the new environment for digital currencies:
“Bitcoin users can handle many of their daily payments needs themselves, without the need for interaction with banks, and avoiding the need to incur bank fees. In the same way, value stored in PayPal accounts moves outside of the bank’s payment systems, depriving banks of valuable payments revenue […]. As digital and crypto-currencies gain traction, the threat to bank’s free-income streams will grow.”
Operators set to abide by the legislation are required to submit a progress report to the PSR by the end of June 2015.
Across the pond
Meanwhile across the Atlantic, the Securities and Exchange Commission (SEC) has outlined legislation regarding how small businesses can raise and access capital, which is due to become law in two months’ time.
As part of the Jumpstart Our Business Startups (JOBS) Act, rules for raising capital will be relaxed to allow small startups raising up to US$20 million within a 12-month period – including those in digital currency – easier market entry. There will also be a second tier pertaining to up to US$50 million, which will see companies subject to “subject to additional disclosure and ongoing reporting requirements,” the SEC stated in its press release about the changes.
“These new rules provide an effective, workable path to raising capital that also provides strong investor protections,” SEC Chair Mary Jo White commented. “It is important for the Commission to continue to look for ways that our rules can facilitate capital-raising by smaller companies.”
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