The United Kingdom’s Treasury has ruled out the possibility of establishing a strategic Bitcoin (BTC) reserve, citing the crypto’s historical volatility as a major concern. A spokesperson for the Treasury confirmed this stance while responding to Protos’ inquiries about whether the U.K. government would consider following the United States in introducing a BTC reserve.
U.K. Refutes National Bitcoin Reserve
“Bitcoin and other crypto assets have been historically volatile assets relative to stable fiat currencies like the U.S. dollar and commodities, such as gold,” the Treasury spokesperson stated.
The decision reflects the government’s cautious approach to digital assets, prioritizing financial stability over speculative investments. While some nations have embraced Bitcoin as part of their economic strategy, the U.K. remains skeptical about its viability as a reserve asset.
Bitcoin’s price fluctuations have long been a point of contention in financial circles. Proponents argue that it represents a hedge against inflation and centralized monetary policies. However, critics highlight its unpredictable swings, which can see its value rise or plummet within short periods.
Meanwhile, the dominant crypto, often called “digital gold,” has experienced a notable decline. After trading above $90,000 after its proposed inclusion in the U.S. reserve, Bitcoin fell more than 5% to approximately $81,513. At press time, Bitcoin traded at around $78,584, marking a 4.56% decrease over the past 24 hours.
U.K. Authorizes Crypto Businesses
Despite rejecting the idea of a Bitcoin reserve, the U.K. government continues to explore regulations around digital assets. Authorities have been working on frameworks to ensure the responsible integration of crypto assets within the financial system while mitigating fraud, money laundering, and investor protection risks.
Coinbase, the largest crypto exchange in America, received the U.K.’s Financial Conduct Authority (FCA) approval to operate as a Virtual Asset Service Provider (VASP) in the U.K. The regulatory approval allows Coinbase to expand its crypto and fiat services in the U.K. as regulations improve in the United States.
Kraken, another American-based crypto exchange, recently secured approval from the FCA to operate electronic money services. The authorization enables Kraken to manage client deposits and withdrawals and expand its fiat payment offerings in the U.K.
