The latest developments in crypto-currencies, which are widely perceived as a form of digital gold, have also put new pressure on the financial services industry, with the Bitcoin price tumbling by nearly half in just four days.
In its latest quarterly financial results released today, the Financial Conduct Authority (FCA) also released figures showing that a quarter of all bank customers in the UK are using Bitcoin.
As part of a wider push by the FCA to encourage consumers to adopt digital currencies and to encourage them to move money around the globe, it published a survey asking the public about how they would choose to spend their cash and how they feel about regulators who have been slow to impose stricter rules.
More than 1,000 UK consumers were surveyed, with 71% saying they would consider using Bitcoin, according to the Financial Times.
Only a small minority, around 25%, would consider withdrawing cash from a bank account or using Bitcoin instead.
The other half of respondents said they would use it for the benefit of themselves and family.
“The number of people using Bitcoin has been growing steadily over the last year.
But, until recently, there was a lack of clarity around what the rules were for those who choose to use it,” said Peter McBride, chief executive of the FCO.”
Today’s results provide further clarity on the regulatory landscape and how we should approach digital currencies.”
According to the FCTA’s figures, the number of UK customers who have invested in Bitcoin or any other cryptocurrency in the past 12 months is now estimated at around 5.4m, with an average value of around $30,000.
The FCA estimates that the total number of non-financial transactions involving Bitcoin could be more than $1.3 trillion over the next three years, or around a quarter the total value of all of the UK’s national debt.
The Financial Conduct Agency said it is now reviewing all the rules it considers appropriate in light of the growing use of digital currencies.
“As a result of this review, we are reviewing the use of virtual currencies in a way that allows us to give greater clarity to the regulators about the implications of their actions,” said a spokesman for the FCEA.
“There is clear evidence that virtual currencies are being used for legitimate purposes, such as trading in goods and services and investing in an investment fund, but we also need to be able to protect the rights of UK consumers by making sure they can’t be used for criminal activity.”
The FCTC said it has asked regulators to consider “whether the regulatory regime can be better set up to protect consumers from risks posed by virtual currencies.”
While Bitcoin is not an actual legal tender, it is being increasingly used for trading and investing online, and has been widely accepted by merchants, such a as PayPal and Google.
In April, UK Prime Minister Theresa May announced a crackdown on illegal online currency trading.