The UK wants to "become the country of choice for those looking to create, innovate and build in the crypto space," according to Economic Secretary to the Treasury Richard Fuller.
Speaking in the first Westminster crypto debate earlier this week, Fuller also stated that “as crypto technologies grow in significance,” the new government formed by Liz Truss is "seeking ways to achieve global competitive advantage for the United Kingdom.”
“The UK can either be a spectator as this technology transforms aspects of life, or we can become the best place in the world to start and scale crypto technologies,” he said. “We want the UK to be the dominant global hub for crypto technologies, and so will build on the strengths of our thriving fintech sector, creating new jobs, developing groundbreaking new products and services.”
Fuller, who was appointed as the new Economic Secretary to the Treasury in July following the resignation of John Glen and retained his post in the new cabinet, also said that the new government is committed to the Financial Services and Markets Bill—the recently introduced legislation which proposes major changes to the regulation of the UK financial services, including the establishment of a regulatory framework for stablecoins.
According to the Treasury official, the bill will expand the existing regulatory framework by adding an ability “to harness” the benefits of stablecoins to lower costs and improve services.
“At the same time, we will protect consumers by ensuring that the face value of stablecoins is backed by the underlying funds and that consumer funds will be safeguarded if a stablecoin provider becomes insolvent,” added Fuller.
2. Embracing cryptoasset technology to establish a stablecoin regime and enable the use of a wider set of payment methods in the UK. pic.twitter.com/OByPNFQJh0
— HM Treasury (@hmtreasury) July 20, 2022
UK attracts crypto investment
Alexander Stafford, an M.P. for Rother Valley, meanwhile said that “Britain is already world-renowned as the beating heart of finance, banking, and markets, so it is only natural for crypto to similarly look to Britain as its home.”
“Britain should welcome the investment and opportunities of crypto,” said Stafford, adding that Truss, who was sworn in on Tuesday following the resignation of Boris Johnson, already “reaffirmed” her commitment to this fast-growing sector.
“Crypto really is an opportunity for everyone, from Truro to Thurcroft and Rother Valley, and all the way up to Scotland and Northern Ireland. If we first fix the problems with education and regulation, I believe we will have a thriving industry here in the UK,” said Stafford.
Fuller agreed, adding that “by making this country a hospitable place for crypto technologies, we can attract investment, generate new jobs, benefit from tax revenues, create a wave of groundbreaking new products and services, and bridge the current position of U.K. financial services into a new era.”
Are there enough reasons to be cheerful about the UK's ambitious goals? Some experts think so, despite potential pitfalls along the way.
“The UK has been one of the centers for world banking for hundreds of years. There is no reason why it cannot be a dominant global hub for crypto technologies with a sensible and forward-looking framework,” Bradley Duke, CEO of the London-based ETC Group, told Decrypt.
He, however, warned about the areas “where there is cross over between crypto and traditional finance.”
“These are the areas that would need to be navigated the most carefully given the large body of existing financial services regulation in Europe,” added Duke.
Earlier this year, Britain's central bank published a Financial Stability Report, pointing to the sharp fall of crypto valuations following the massive sell-offs in May and June.
Although that wipeout “did not pose risks to financial stability overall,” the Bank of England said that tougher laws are needed to protect the wider financial system in the future.