UK Chancellor of the Exchequer George Osborne is expected to announce the government's digital currency plans following the new budget.
Sources close to the groups involved in the consultation process have tipped this week’s 2015 UK budget announcement as the stage for a new government stance on digital currencies.
Taking to the floor in the House of Commons to outline his plans for the financial package, Osborne announced:
[That in this budget] “we take steps to promote competition, back fintech, and encourage new business like global re-insurance.”
How the financial technology sector will be specifically assisted has not yet been announced, with confirmation coming after the publication of the full budget later today, 18 March.
In the past few weeks both the Chancellor and the Bank of England have published favorable opinions on the subject of Bitcoin and digital currency technology. Making a surprise U-turn on the subject in the end of February, the Bank of England issued a research paper commending the potential benefits of the blockchain.
Osborne himself has also become more vocal about the possible benefits that the digital currency sector has to offer the UK national economy.
The budget comes in the final two months of the current UK parliament, leading many to expect a “giveaway” of financial perks, and tax breaks, as the ruling Conservation coalition gets itself ready for election season.
With the recent highlighting of the digital currency sector by both the Chancellor and BoE, a budget policy focused on assisting this sector could be used by Osborne to try and demonstrate a track record of growing the economy.
The emergence of a crypto-tech scene in London would fit well with a Chancellor trying to communicate a message of an economy “walking tall again”, with return to job creation and economic growth, following warnings of falling growth and missed targets.
London's status as a traditional global financial hub has already attracted several international crypto start-ups to the city. At the end of 2014, Australian Bitcoin wallet and exchange service CoinJar relocated their headquarters to the city citing the fact that “UK exempts digital currency trading from value added tax (VAT)” as a core reason.
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