U.K. Emerging as Top Crypto Bull
The recent election of Rishi Sunak, former Finance Minister turned Prime Minister, will likely make the European nation bullish on cryptocurrency. Unlike his predecessor, Truss, who showed support for a low-regulation approach to crypto but not much else, Sunak advocated for turning Britain into a global crypto hub earlier this year.
Among his policy recommendations are full adoption of stablecoins for day-to-day transactions, while creating the financial infrastructure to help firms innovate in the digital asset sector. In October of last year, Sunak spoke of creating a possible central bank digital currency (CBDC) at the Bank of England, which could “offer businesses and consumers new ways to pay.” Just months prior, Sunak announced a joint task force between the Treasury and central bank to research how CBDCs could work to compliment Britain’s current financial system.
“We want to see the businesses of tomorrow — and the jobs they create — here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term,” said Sunak in April. Sunak is no stranger to finance. Before he joined politics, Sunak worked at the investment bank Goldman Sachs as a hedge fund manager in the United States.
Under his leadership as Finance Minister, the Royal Mint, U.K.’s coin producer, was tasked with creating a non-fungible token (NFT) collection, which has yet to be released.
Sunak also helped usher in the Financial Services and Markets Bill, which if passed, would extend power to local regulators over the cryptocurrency ecosystem, including the incorporation of stablecoins into payments regulation. In a meeting held on Tuesday, October 25, the lower house of Parliament voted in favor of adding a cryptocurrency amendment, which would incorporate digital asset activities to be regulated under this bill.
“The substance here is to treat them [crypto] like other forms of financial assets and not to prefer them, but also to bring them within the scope of regulation for the first time,” said Andrew Griffith, the financial services and city minister who proposed the amendment. “The Treasury will consult on its approach with industry and stakeholders ahead of using the powers to ensure the framework reflects the unique benefits and risks posed by crypto activities,” he said.
The cryptocurrency provision relies on a definition set forth for “crypto assets” which would incorporate all digital assets under the scope of that definition into the Financial Services and Markets Act of 2000, the current law governing financial regulation. The measure would potentially allow for regulation of cryptocurrency promotions and outlaw companies that are not authorized to operate in the U.K. It will also ensure the country’s Treasury is adequately equipped to respond to developments in the crypto sector quicker than before, allowing for more flexible regulation in the financial services sector.
A growing cryptocurrency movement has also been emerging in Parliament. The Crypto and Digital Assets All Party Parliamentary Group (APPG), chaired by Scottish National Party member Lisa Cameron, has called on the British government to provide increased clarity in the cryptocurrency sector.
“U.K. crypto and digital asset firms desperately need clarity over the U.K.’s approach to crypto policy and for the government to deliver on its vision for the U.K. crypto sector,” she said, in a written statement Cameron released on Tuesday. “We need a proportionate approach to regulation that balances risk, ensures high levels of consumer protection and that doesn’t hamper growth and innovation in the sector.”
As the country lies in wait, hoping for a new Prime Minister that can lead Britain out of economic turmoil, the Financial Services and Markets Bill will move to the House of Lords for passing before final royal approval is granted.
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