The UK wants to position itself as the global hub of the crypto industry with a series of planned legislative and regulatory changes – explains Finance Minister Rishi Sunak. He should be knocking open doors in the European crypto industry.
The UK announces a series of measures aimed at making the country the “global hub for cryptoasset technology and investments.” Finance Minister Rishi Sunak said this personally. He wants “the businesses of tomorrow – and the jobs they create – to be here in the UK” and therefore “regulated effectively so that they have the confidence to plan and invest for the long term.”
John Glen, Economic Secretary of the Treasury, explained in more detail what the government is planning in a speech at the “Innovate Finance Global Summit”.
However, there is no talk of Bitcoin or other cryptocurrencies. The focus is on stablecoins, DeFi and NFTs.
Stablecoins, if properly regulated, can be an efficient payment method and increase consumer choice. Therefore, the government plans to integrate stablecoins into the regulation of means of payment and create the conditions for both issuers of and service providers to operate around stablecoins in the UK.
By recognizing and regulating the potential of this technology, John Glen says, governments can ensure that the financial system remains stable and regulated while consumers can safely and securely use the new technologies.
Additionally, Glen announced that the UK would be proactive in exploring the transformative benefits of Distributed Ledger Technology (DLT) for UK financial markets. In this way, DLT – which is primarily another, less loaded term for blockchain – enables data to be synchronized and shared in a decentralized manner, thereby increasing efficiency, transparency and reliability.
The government also wants to create a “sandbox” where companies can experiment to innovate to build the infrastructure services that underlie the new markets. A research program will explore how DLT can serve as a tool for issuing and managing government debt.
This should go hand in hand with an optimization of the British tax system. The government is still exploring how this can promote the further development of the crypto market in Great Britain. Another topic is DeFi loans and how they will be treated for tax purposes.
In addition, Rishi Sunak has commissioned the Landes mint, called the Royal Mint, to issue an NFT (Non-Fungible Token) later this summer.
Almost all measures so far are announcements. Whether and how reality will follow them remains to be seen. Nevertheless, the signal that Great Britain is sending to the crypto industry can hardly be overheard: you are welcome and we will not hug you, but will support you through regulation with a sense of proportion.