London, center of the $5-trillion-a-day global currency market, now wants to be home to a controversial upstart – bitcoin.
British authorities have come out in support of digital currencies in the name of promoting financial innovation, while proposing that regulations should be drawn up to prevent their use in crime.
But it is technophiles who are leading the drive to make London a real-world hub for trade in web-based "cryptocurrencies", of which bitcoin is the original and still most popular.
Every Tuesday evening in a trendy cafe in London's Shoreditch neighborhood, a group of digital currency enthusiasts gathers to discuss ideas, "vape" from e-cigarettes and exchange their pounds for bitcoins in a dedicated "ATM".
With more than 2,200 members, CoinScrum, run by a former derivatives trader who left the world of traditional finance to work on a digital currency start-up, is the biggest bitcoin networking group in the world. Its meetings draw a mostly young, mostly male crowd – some amateurs, others who have come to Britain to start bitcoin businesses.
Already the capital of traditional currency trading, London is competing with San Francisco's web expertise and New York's financial clout as it pushes to be the foremost financial technology – or fintech – center in the world.
Last month the British government announced plans to regulate digital currency exchanges to prevent their use in money-laundering, and to help to develop a set of standards for cryptocurrencies.
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Backers of bitcoin praised this for lending legitimacy to the currency – which unlike traditional money has no printed form and remains outside the control of central banks – without stifling innovation.
"London has been the home of financial innovation for hundreds of years," said Nicolas Cary, co-founder of Blockchain, which provides bitcoin data and "wallet" software for storing the currency. "It would be a historical mistake not to make this the home of digital currencies. There's an incredible amount of talent and experience here."
Just over 14 million bitcoins are in circulation, worth around $3.1 billion at the current exchange rate of around $220 each.
Bitcoin brought 29-year-old Cary to Britain two years ago from Denver, Colorado. He joined forces with Ben Reeves, then a 22-year-old computer science graduate, to develop the Blockchain wallet, spending the first year working out of a two-bedroom apartment in northern England.
Now Blockchain, named after the technology behind bitcoin, is the world's biggest wallet provider, with over 3 million users. Last year it raised over $30 million in its first round of funding, including from billionaire Richard Branson.
