London’s long-established financial markets economy is, by its very nature, the center of giant conglomerates which date back centuries to the days of marine reinsurance and the wood paneled chambers of medieval financiers prior to the industrial revolution.
As a result of this, London, despite being the world’s largest financial center, often does not play host to radical or innovative new financial technology which could easily be written off as fads by the several-hundred year old institutions which dominate the Square Mile…. until now.
In a similar break from tradition as the wood paneled chambers of Leadenhall Street and Canon Street having given way to the plate glass towers of Canary Wharf in the 1990s, the British government has now begun to look toward shoring up London’s position as a worldwide hub for financial technology, closely followed by some electronic trading companies.
To that end, whilst it is very unlikely that Bitcoin will replace Her Majesty’s paper currency any time soon, George Osborne, Britain’s Chancellor of the Exchequer, has today stated that he is to launch a review to assess how the United Kingdom could become a leading global center for Bitcoin and other virtual currencies.
Rather as an antitheses to the use and application of Bitcoin in nations without a free market economy such as Argentina, where the government is opposed to the use of any currency other than Peso and the citizens are rapidly taking to Bitcoin in order to free themselves from the disastrous Argentine financial system and its draconian capital control laws, Britain is a polar opposite.
Mr. Osborne has instructed Treasury officials to work on a study looking at the benefits and threats of digital currencies, which remain unregulated in Britain, but the systems by which they operate are beginning to attract the attention of reputable regulators worldwide, in North America and Switzerland.
Britain’s taxation department, HM Revenue and Customs, did away with plans to charge VAT on the creation of Bitcoin. However VAT is due, at 20%, from suppliers of goods or services sold in exchange for any cryptocurrency.
The move to establish Britain as a Bitcoin hub is likely to be confined to the financial industry, as British citizens have no need to eschew their Pound, however a potential generator of business may be that London could be a prominent Bitcoin center to serve the requirements of the entire world’s crypto currency ecosystem, from technology to supply.
Tomorrow, Mr. Osborne is due to present at the Innovate Finance conference in London, which is attended by senior financial industry executives from the large institutions with their headquarters in London. At the conference, Mr. Osborne will cover the subject of his vision to establish London as a global center for virtual currency, by stating “The key to the British government’s long term economic plan is cementing Britain’s position as the center of global finance.”
Indeed, Mr. Osborne realizes that embracing new methodologies is key to survival and can compliment Britain’s old school financial sector due to a highly sophisticated financial infrastructure being in place in London, a wealth of knowledge among large firms and a highly regarded regulatory structure.
Mr. Osborne will continue by stating that “”It’s only by harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we’ll ensure Britain’s financial sector continues to meet the diverse needs of businesses and consumers, here and around the globe, and create the jobs and growth we all want to see in the future.”
Further evidence of the technological evolution among London-based companies is Trade Interceptor’s launch of a fully mobile brokerage solution.
Many retail brokers worldwide have become reliant on offering a mobile trading solution to their clients as a generator of significantly more trading volume than if they only offered a desktop platform. From discussions within certain platform development circles, LeapRate has gleaned recently that some companies may seek to move away from desktop platforms entirely, offering tablet and smartphone based solutions only, viewing this as the future for retail brokerage software.
Trade Interceptor has been involved in producing multi-broker mobile solutions for some years, however today the company announced that it has launched its own in-house retail FX brokerage, which places the emphasis entirely on mobile FX trading.
The company has produced launch information on its Facebook page, aiming its offering at the retail trader. According to Trade Interceptor, the new brokerage is the only FX firm of its kind which was created purely for mobile trading, and will operate under the auspices of the Financial Conduct Authority (FCA) from its London headquarters.
These two significant developments are a far cry from London’s evergreen institutional FX sector, however, with such co-existence and the backing of the regulatory authorities and initiatives by the government, they serve to demonstrate that evolution is often better than revolution.