Regulators in the United Kingdom have announced they will begin applying anti-money laundering rules on digital currency exchanges. The British treasury offers that the move will magically promote innovation and lessen criminal activity. This move however in reality means something other than what Reuters' press release on behalf of the Treasury supposes.
Bitcoin brought into existence a world where unthinkably large amounts of arbitrary value could be transported swiftly and without any regard for the position of the sender and receiver within the physical world. A party with a private key that corresponds to value can spend to an address that corresponds to any other party's private key. Once the transaction starts being relayed on the network the only necessary test becomes a miner deciding whether it is more profitable to mine the transaction than to not mine it into a block.
In contrast London's position as a financial capital is maintained entirely through inertia. For a while Britain was able to sustain itself economically after the original debasement of the pound sterling away from its original definition as an actual pound of sterling silver through the maintenance of a vast foreign empire, but the foreign empire has faded away as well. The movement from simple debasement to complete fiat had been no less kind to London with the pound falling from a fixed rate of $4.03 US to the pound during the second World War and Bretton Woods to today's $1.48 US to the pound.
Where Britain once maintained India and the skeleton of the Ottoman empire as vassals, today the United Kingdom struggles to maintain hordes of Anglo-Saxon chavs in a state that vaguely resembles civilization in council houses on their own homeland. The once vast overseas empire has retracted to a rock at the bottom of the Iberian peninsula and various islands that would be otherwise uninhabitable by human beings if it wasn't for constant maintenance. Simply this past century's Britain has served effectively as the opposite of the civilizing force it had once had on the world.
This effect Britain has spewed forth this past century is in exact contrast to the effect Bitcoin has been promoting. While Britain enumerates entire swaths of geography and population as bad, Bitcoin allows the enumeration of good persons. While Britain encumbers their entire population for the good of the chav, the worst form of humanity to exist in history; Bitcoin exists without any regard for the the most vile person. Bitcoin offers neither a positive nor negative judgement, without private keys corresponding to an value the lowest simply exist outside the Bitcoin system.
A person has to explicitly opt in to interacting with Bitcoin. Not a single thing about Bitcoin may at all force any person into the larger Bitcoin ecosystem. Yet the United Kingdom supposes it can spend what is left of its influence on defeating Bitcoin's very nature.
The United Kingdom has a long history of being hostile to civilian applications of cryptography of which the Bitcoin network is the greatest application so far. As far back in history as the Search Legislation Regulation of Investigatory Powers of Act 2000 the United Kingdom has reserved the power to compel ostensible citizens of the Kingdom to disclose private keys to benefit the economic interests of the state. That old law of course meaning that anyone in the United Kingdom who happened to hold any Bitcoin at all could be subject to seizure to bolster the state's holdings if it decides on a whim it needs Bitcoin to hold.
It is a simple fact of the legal system constructed in the United Kingdom that residents outside of the royal family are not citizens, but subjects. Any property subjects of the crown might imagine themselves entitled to is regarded a property of the state that has been of right always a property of the state.
There is unlikely to be a sudden mass exodus of Bitcoin holders from the United Kingdom as that would be awfully load. Expect on the contrary that persons who happen at the moment to reside within the borders of the United Kingdom to leave at their leisure because their mother country has neither any idea that they hold any cryptocurrency nor any actual authority to seize such cryptocurrency in the event they could identify it.