Brexit remains one of the world’s great geopolitical uncertainties. Even as the European Union expands new regulatory frameworks across its member states, Britain must forge its own path. These ripples will be felt acutely within the financial and fintech sectors – for which, UK cities like London serve as leading international centres.
No one knows exactly how Brexit will affect blockchain and cryptocurrencies, though. As Britain prepares to leave the European Union, the EU is still in its early days of analysing and regulating digital currencies. Despite the uncertainties, we can make certain predictions about how to buy Bitcoins after Brexit has finally come to pass.
Bitcoin exchanges are largely international in their scope. With headquarters in friendly jurisdictions like Cyprus (and the UK’s Gibraltar, as it happens), Bitcoin exchanges cast a wide international net, and often avoid regulatory scrutiny.
This may not last forever. The European Union allows certain free financial transactions among its member states (and beyond), but anti-money-laundering and terrorism regulations are most often the role of the individual member state. As Britain departs from these cooperative systems, it’s likely that increasingly complex regulations will no longer “sync up” between Britain and the EU. Expect certain popular Bitcoin exchanges to be banned, or at least to face greater regulatory hurdles, in the EU, Britain, or both post-Brexit.
Anyone wanting to know how to buy Bitcoins will eventually wish to learn about taxation. Many EU members disagree with how to classify Bitcoin and various altcoins. While Bitcoin (BTC) has no other purpose than to act as a means of exchange, many of the altcoins are not so simple a matter. England is sophisticated in its understanding of cryptocurrency, and we expect to see it lay out clear taxation requirements for investments and exchange. We do not expect these to mirror the requirements laid out in the future by the EU or its member states.
Britain has been very favourable to cryptocurrency development in certain ways, Gibraltar acting as a crypto haven chief among them. The UK is already making financial agreements with other non-EU nations. Many of these countries are very active in cryptocurrency innovations: with coins and exchanges in South Africa, South Korea, Russia, Australia, etc.
In the future, it may be more simple to transfer, buy, and spend digital currencies within/through other nations than it will with EU nations, at least as the UK is concerned. Furthermore, it may be difficult for internationally facing blockchain projects within the EU to interface with UK users and other blockchain companies, and vice versa.
Of course, the changes may not be as stark as you might expect. It remains notoriously difficult to regulate Bitcoin and the altcoins, specifically because they operate without respect to any specific national borders (in most cases). Banning any cryptocurrency outright is hard to do, and taxing cryptocurrencies efficiently is no easier.
It’s likely that only when the cryptocurrency markets are more mature, and more fully integrated into conventional industry, that the differences between EU and UK blockchain policy will be possible to anticipate. In the meantime, cryptocurrency is likely to continue occupying its own unique space – one where innovation, price volatility, and big dreams play in the sandbox of regulatory permission, even after Brexit.