However, there may be a backdoor on the horizon for money launderers.
Online bitcoin exchanges operating in the United Kingdom will be legally required to disclose user's identities and report any suspicious behaviour to the Treasury. In the case of Coinbase, it is required by law to hand over data when any U.S. citizen sent, received, or traded $20,000 worth of these currencies.
The Treasury is set to unveil plans to regulate bitcoin in the coming year amid fears the cryptocurrency is being used to launder money and avoid tax.
The UK is behind the criminals and the United States in terms of law enforcement and regulation, according to Julian Dixon, CEO of anti-money laundering and big data specialists, Fortytwo Data. An EU-wide plan will force Bitcoin trading platforms to monitor transactions and report any that seem suspicious. But after falling from $11,725 to $10,940 yesterday, it has recovered most of that ground and is now trading at $11,291.
He told The Daily Telegraph: "These new forms of exchange are expanding rapidly and we've got to make sure we don't get left behind - that's particularly important in terms of money laundering, terrorism or pure theft".
"It would be timely to have a proper look at what this means".
But the Treasury has now said it intends to begin regulating the virtual currency, which has a total value of £145 billion, to bring it in line with rules on anti-money laundering and counter-terrorism financial legislation.
Bitcoin hit record highs of $11,879 (£8,842) on Sunday night, before dropping to $11,253 on Morning morning, according to online cryptocurrency trading platform Coin Exchange.
The Treasury changes, which were unveiled in plans to change the legislation in a written parliamentary answer from Stephen Barclay, the Economic Secretary to the Treasury, come amid increasing fears bitcoin is being used by gangs to hide criminal earnings.
"We expect these negotiations to conclude at European Union level in late 2017 or early 2018".