Can Brexit give the UK a crypto boom? The treasury thinks so
UK crypto firm executives have said that although the UK’s 2016 departure from the EU created an initial overload of regulations that delayed any meaningful progress on crypto regulation, there is now the potential to make the UK a crypto hub following enthusiastic comments from the UK treasury.
John Glen, the economic secretary to the treasury, said Brexit will provide the opportunity to differentiate the UK from the EU’s regulatory framework to attract more firms to set up business in the UK. “Whatever you thought about Brexit, we’re now seizing the opportunity that comes from it,” Glen said, adding, “This regulatory freedom is critical.”
This week, the FCA held its first policy sprint to discuss regualtion for the industry and heard from executives, academics and stakeholders on how best to regulate the industry. If the FCA comes in line with the government’s recent position, we may see a new framework emerge that attempts to compete with the EU as a place to do business.
Last month a letter to the EU, cosigned by 40 crypto companies, objected to proposed legislation by the European bloc, potentially presenting the UK with an opportunity to learn from the EU’s mistakes. The most contentious of the EU’s proposals to crypto industry insiders was the requirement for all crypto transactions to be logged. This, the letter’s signatories argued, would make the EU a less competitive place for crypto companies.
The UK also has an advantage over the EU its government will be hoping to press. According to a report by the Daily Record, the UK has around 350 firms compared to around 1,225 in the US — currently making it the second-largest home for crypto firms in the world.
Since 2016, around 24 finance firms have announced their intention to move operations out of the UK to the EU — taking around £1.3 trillion of assets with them. This may go some way to explain the UK government’s growing interest in the crypto space as the industry could provide a way to recoup some of its losses since the Brexit vote.
Last month the Chancellor of the Exchequer, Rishi Sunak, outlined his intention to turn the UK into a “global hub” for crypto. “By regulating effectively we can give them the confidence they need to think and invest long-term,” Sunak said.
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