How the UK Intends to Become a Crypto Hub
Recently, the UK has announced several major changes to economic policy. The tax cuts have gained most of the media’s attention, but it’s also possible that the UK could open its arms to the cryptocurrency industry.
New Prime Minister Liz Truss, who took over from Boris Johnson in September, has previously shown support for removing regulations and allowing cryptocurrency companies to thrive in the UK.
Back in 2018, Truss spoke of welcoming cryptocurrencies in a way that doesn’t constrain their potential. At the time, she was the Chief Secretary to the Treasury and also advocated for the removal of regulations that restrict prosperity. Previously, she has spoken on blockchain technology in a House of Commons debate about creating opportunities for US-UK trade and allowing the UK to lead the way in innovative areas.
With Truss as the new Prime Minister and evidently taking a new direction in terms of economic policy, it will be interesting to see how the UK can become a hub for cryptocurrency innovation. However, recent regulations from the UK’s Financial Conduct Authority have seen a lot of UK-based crypto firms leaving the country. Here are some changes the UK could make to welcome cryptocurrencies and become a crypto hub.
Better Crypto Education
Currently, the UK ranks as one of the highest countries in the world for cryptocurrency usage. While exposure is good, it can still be a lot higher, and it’s important that people are educated properly before committing their money to a project. In recent years, there has been a lot of growth in this area, with cryptocurrency courses becoming more popular both in the UK and abroad. The MIT Media Lab course allows UK residents to study leading cryptocurrency materials online and develop their understanding of the crypto markets.
A growing number of world-class institutions offer courses on cryptocurrencies and blockchain, helping to improve the overall state of crypto education in the country. Aside from helping people make informed decisions when investing, improved crypto education can help more people gain interest in this market and work on developing new and exciting crypto projects.
UK Regulated Stablecoins
Stablecoins have become an important part of the cryptocurrency market, allowing people to easily trade currencies and make fiat payments on the blockchain. However, many of these coins are unregulated, meaning that a lot of vendors are still hesitant to accept them for payments. The UK Treasury declared in July that it would work to control “some forms” of stablecoins used as currency.
The Financial Services and Markets Bill, a proposed package of laws, was presented to the UK Parliament’s lower house in July. The bill, which is presently in its second reading in parliament, is working its way through the legislative process of the UK government and is intended to alter EU-derived legislation governing the UK’s capital markets. This bill would officially allow stablecoins to be used as payments and would help increase the usage of pound sterling-backed coins.
Regulatory Sandbox
The UK is one of the best places in the world for emerging financial technology companies, thanks partly to its financial market regulatory sandbox. This allows startups to test out innovative products on real customers, preventing outdated regulations from holding them back while they grow. The same sandbox could be applied to crypto firms, many of which have been negatively affected by regulations in recent years.
The government will legislate to establish a financial market infrastructure (FMI) “Sandbox,” which will allow businesses to experiment and innovate in providing the infrastructure services that underpin markets, in particular by enabling the testing of Distributed Ledger Technology, according to a statement from HM Treasury in April 2022.
