Meanwhile, one new player in the market warns that over-zealous intervention could dissolve their core benefits of privacy, security, low to no fees and free marketability. In an extreme case, it could restrict legitimate business and create another black market.
Dan Andersson, Co-Founder of LEOcoin, explains: "We are delighted that the UK Government is for the first time appearing to take cryptocurrencies seriously enough to launch what is effectively a mini consultation. However, it must recognise that cryptocurrencies require a whole new way of thinking, and a much more flexible approach from governments. It is important to allow precedent to develop legally within the free market framework rather than shape the course of cryptocurrencies in their infancy."
LEOCoin has 89,000 strong established and aspiring member base of entrepreneurs enthusiastically embracing the currency which is designed to be user friendly and accessible with mass market appeal, warming up to recruit outlets and merchants globally in Q1 2015 to accept it for purchasing goods and services.
They believe it provides a credible alternative to developing start-ups and enterprises who currently face significant financial barriers to growing their businesses.
Andersson continues: "A useful starting point for cryptocurrency is 'is all potential regulation bad?' We would say of course not. There are many steps that can be taken to create more confidence within the mainstream population without severely hampering innovation or the privacy of users.
"All we are asking at this stage is for the UK Government to start to understand the idiosyncrasies of cryptocurrencies and to recognise the benefits they bring, particularly to entrepreneurs and SMEs, which are the lifeblood of the UK economy, rather than spending too much time focussing on potentially restrictive and ultimately redundant regulations."