As Bitcoin [BTC] and other cryptocurrencies chose to take the downward slope, after several days of the sideways movement, the Cryptoassets Taskforce also released a report on cryptocurrencies and the distributed ledger technology earlier this week.
The task force was launched by the Chancellor of the Exchequer, which consists of three main regulatory bodies of the United Kingdom namely, Financial Conduct Authority [FCA], Bank of England and HM Treasury, in the month of March 2018.
The report underlines that irrespective of Bitcoin [BTC] and other cryptocurrencies being used as a “means of exchange”, they are not declared as money by either the Bank of England and G20 Finance Ministers or Central Bank governors. They quote cryptocurrencies’ high volatility as one of the reasons for them to be not considered as money.
The report stated:
“They are too volatile to be a good store of value, they are not widely-accepted as means of exchange, and they are not used as a unit of account”
The report also emphasizes that Bitcoin was originally created to be a means of exchange, however, in the current scenario, most of the people are holding the coin as an investment.
Furthermore, it stated that there are around 500 stores, bars, and coffee shops that accept Bitcoin as an option for payment, out of which, few mainstream portals have stopped supporting payments via cryptocurrencies. In addition, the daily trade volume of Bitcoin against sterling in the UK is close to 0.33% in comparison to daily trade volume.
The Taskforce stated that because of concerns related to customer protection and market integrity in the cryptocurrency market, the Financial Conduct Authority will seek information regarding the ban on Bitcoin [BTC[ derivates. However, the ban will not be imposed on cryptocurrency derivatives, which have been qualified as securities. They stated:
“[…] the FCA will consult on a prohibition of the sale to retail consumers of all derivatives referencing exchange tokens such as Bitcoin, including CFDs, futures, options and transferable securities […] however CFDs on securities would remain subject to ESMA’s temporary restrictions and any future FCA proposals to implement permanent measures in relation to CFDs”.