How to regulate Bitcoin? Barclays Bank recommends loose regulation

In a recent interview with CNBC, Barclays CEO Ashok Vaswani revealed that the bank has been communicating with the UK Financial Conduct Authority (FCA) to study a way to safely regulate Bitcoin.

Conversations with the FCA

Barclays Bank announced that it has been in active dialogue with British regulators on how to make Bitcoin "play a role" in the UK's fintech sector. Barclays CEO Ashok Vaswani told CNBC that they had previously met with the FCA, the UK's main regulator in the fintech field, to discuss the regulation of virtual currencies.

Although they initially focused on the topic of blockchain technology, they soon moved on to bitcoin and other cryptocurrencies. Ashok Vaswani told CNBC:

In fact, I went to the FCA and talked about how to play a role in... cryptocurrencies.

Barclays has shown a clear interest in the cryptocurrency market and economy, but the CEO is cautious about his positive attitude towards virtual currencies.

Obviously this is new territory and we have to be careful with it. We are currently trying to find the right approach.

Relaxed regulatory environment

Chris Woolard, head of strategy at the FCA, has repeatedly stressed in recent days that companies and institutions must be cautious when dealing with cryptocurrency matters, but at the same time he also said that the FCA has not banned Bitcoin and blockchain technology.

We will not prohibit regulated companies from engaging in digital currency transactions, nor will we prevent banks from providing services to digital currency companies that use blockchain. I am not saying that we think digital currencies are inherently bad... I am just saying that we should be careful when dealing with digital currencies.

In addition to the public meeting with the FCA, Ashok Vaswani also revealed Barclays’ future plans in the field of cryptocurrency. Barclays partnered with the social payment app Circle last year. Circle can transfer funds through the communication app and support Bitcoin transactions.

Barclays is one of a growing number of large financial institutions calling for a lighter regulatory environment for the cryptocurrency market. Despite growing pressure to regulate the fintech industry, many commentators believe it will take years for governments to develop a comprehensive legal framework to address the unique challenges and opportunities presented by Bitcoin and other virtual currencies.