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UK downplays talk of regulating Bitcoin

A twenty-five bitcoin piece.
Tomohiro Ohsumi | Bloomberg | Getty Images
A twenty-five bitcoin piece.

Reports the U.K. is "actively considering" regulating the virtual currency Bitcoin are exaggerated, the country's financial watchdog has said.

CITY.AM newspaper reported that the U.K.'s Financial Conduct Authority (FCA) was considering regulating the currency, citing Tom Robinson, the co-founder of Bitcoin currency exchange, Bitprice. who had recently attended a "Financial Innovators Summit" at 10 Downing Street.

"We know they're looking at Bitcoin and seeing how it fits into existing regulations," Robinson told CITY.AM on Wednesday. "In terms of regulation the U.K. has been slow to act, while the U.S. and Germany have issued guidance."

(Read more: Bitcoin recognized by Germany as 'private money')

However, the FCA said on Thursday it was simply "keeping an eye" on Bitcoin developments, rather than actively considering regulation.

"Whilst the FCA does not regulate Bitcoins, businesses providing services related to Bitcoins or other digital currencies should consider whether they are carrying on regulated activities," a FCA spokesperson said.

James Smith, Robinson's colleague at Bitprice, said there was no discrepancy between the FCA's comments and Bitprice's.

(Read more: Bitcoin gets the FBI, Homeland treatment)

"We understand and appreciate their measured approach, and we share their desire to protect the consumer," Smith said.

Bitcoin is a virtual currency that allows users to exchange online credits for goods and services. While there is no central bank that issues them, Bitcoins can be created online by a process known as mining.

Bitcoin has hit the headlines in recent months, after New York's top banking regulator issued subpoenas to several companies, as part of an inquiry into the virtual currency industry. Now, both the FBI and a U.S. Senate have launched investigations into Bitcoin, with the FBI concerned about ties with money laundering.

Elsewhere, Germany has recognized Bitcoin as a "unit of account", meaning it can be used for tax and trading purposes in the country.

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