A visual representation of the digital cryptocurrency Bitcoin, on display in Paris, France on December 23, 2017.
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LONDON — Britain is making renewed efforts to become a global cryptocurrency hub, but faces a difficult road ahead amid criticism from local entrepreneurs and U.S. competition under President-elect Donald Trump.
The UK Labor government is committed to creating a permissive environment for businesses engaged in cryptocurrency and blockchain-related activities.
Tulip Siddiq, the UK’s economic secretary to the Treasury, said in a recent speech that the government aims to involve businesses “as early as next year” in drafting legal provisions on digital assets, including stablecoins (and sovereigns). Tokens whose monetary value is pegged).
She also said the government would not use the cryptocurrency staking service, which rewards users for holding tokens, as a collective investment scheme. Crypto industry insiders had worried that this approach would create onerous regulatory requirements.
“This is an industry with huge potential and already plays a central role in the UK’s vibrant tech scene,” UK Investment Minister Poppy Gustafsson said at an event organized by Invest UK last week. Coin LibrarySupport advocacy organization Stand With Crypto.
Gustafsson said the government is “committed to nurturing and embracing blockchain” and “has taken decisive steps to support the industry and ensure we remain at the forefront of global innovation.”
One example she cites is the launch of Digital Securities Sandboxa testbed for the development of novel solutions based on decentralized ledger technology for the issuance, trading and settlement of securities in a just-in-time regulatory environment.
Another example is “Digital gold platingA pilot was launched last month to issue UK government bonds via blockchain.
Can the UK become a cryptocurrency hub?
While the UK is pushing ahead with a series of regulatory proposals for cryptocurrencies, not everyone is convinced it can become a globally significant venue for the technology.
“I don’t know if we have the policymakers, the government, the risk appetite and the pro-entrepreneurial attitude to really capitalize on the opportunities of this generation,” said British entrepreneur Steven Butt, known for his CEO Diaries podcast series Steven Bartlett said during a fireside discussion at the “Stand with Crypto” event.
Bartlett said that after spending time in the San Francisco and London offices of his blockchain startup Thirdweb, he felt “it was really unfair to try to build a company here compared to being there.”
Data from the UK’s Financial Conduct Authority shows growing demand for crypto products in the country – with the average value of cryptocurrencies held by Brits rising to £1,842 ($2.33)7Prices this year start from £1,595 a year ago, according to one agency Investigations issued by regulators last month.
FCA also Published roadmap Detailed plans to impose regulations on the cryptocurrency industry. The regulator will publish discussion papers on stablecoins, trading platforms, lending and staking over the next two years, with plans to implement a complete regulatory regime in 2026.
Competition from the United States
Tom Duff Gordon, vice president of international policy at Coinbase, told CNBC that the UK should not let the momentum for cryptocurrency regulation slow down after Trump’s election.
The Republican politician campaigned on a notoriously pro-crypto policy platform and vowed that he Bitcoin seized by the federal government will not be sold, and he will replace current SEC Chairman Gary Gensler, who took an aggressive enforcement approach against various cryptocurrency companies while leading the agency.
Last month, Gensler announced his intention to resign as SEC chairman on January 20, the date of Trump’s inauguration.
“The UK has done a lot,” Coinbase’s Gordon said in an interview with CNBC on the sidelines of the event. “The UK has a huge opportunity to really succeed in this area, but we do need regulatory clarity.”
“We would like to see secondary legislation around staking and stablecoins,” Gordon added. “The city minister mentioned that – so we want to see that as well.”
Although the UK now has a regulatory roadmap in place, cryptocurrency industry executives worry that waiting until 2026 to roll out a full regime could put the country behind its transatlantic peers.
Coinbase Chief Policy Officer Faryar Shirzad told CNBC in a recent interview that he now believes the United States will approve federal crypto legislation “fairly soon” — possibly as early as 2025.
Meanwhile, in the European Union, comprehensive legislation called the Regulation of Markets in Crypto-Assets (MiCA) will come into full effect later this month.
Outdated regulations hinder growth
George MacDonald, Chief Executive Officer KR1, a publicly listed digital asset investment company focused on blockchain technology, said Britain’s outdated rules make it difficult for cryptocurrency-focused investment businesses like his to become more widely known as listed companies.
KR1 is currently listed on the Acquis Stock Exchange, the trading venue for high-growth companies.
McDonaugh said KR1 had been trying for years to trade on the London Stock Exchange’s main market but had been blocked Rules for 2018 Tokens like this are prohibited Bitcoin and ether Ride on publicly listed vehicles is not permitted.
“Time has passed since then,” McDonald said. “We believe that by removing this restriction we can unleash a tsunami of capital into the UK market.”
As the FCA tries to figure out how to develop and implement a regulatory encryption framework, experts hope it will encourage and promote innovation, rather than stifle it.
Irfan Baluch, a cryptocurrency lawyer at Cripps, said he hoped the UK would take inspiration from the EU, which has taken a “leading position” in cryptocurrency regulation under MiCA.
“Application 20th “Going from century law to 21st century technology… will only stifle innovation and drive crypto operations offshore,” Baluch said. He added that the FCA’s crypto regulatory roadmap appears to be a “nod in the direction of solving this problem” — at least for now. That’s right.
“The UK has this incredible opportunity at this moment to take really decisive action in the direction of innovation,” Bartlett said.
“If we do this in the way that the United States seems to naturally do, we won’t find ourselves the residual beneficiaries of blockchain or artificial intelligence technologies — we can play a truly meaningful role in ensuring that these technologies add value. role but it has to be radical,” he added.
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