Bitcoin is hope in the UK – Bitcoin Magazine
This is an opinion piece by Bitcoms, a writer and British Bitcoiner.
“I joked on stage that when it comes to Bitcoin, I don’t think of myself as being from Edinburgh – I think of myself as being from Twitter,” says writer Allen Farrington. “I’ve been worrying, looking forward, that Britain might be one of the last places to really take it seriously.”
But sitting with me between sessions at the first Bitcoin Collective conference in his hometown, Farrington feels more positive. “I think this event is really impressive,” he says. “To see all the effort that has gone into this, and to see all the British Bitcoiners who have been equally excited about it and have come, it’s really encouraging.”
Ray of hope in no man’s land: a ray of sunshine between Princes Street and Edinburgh Castle (Photo by Bitcoms)
He has a point: with dozens of international speakers, an impressive line-up of homegrown exhibitors and a genuine buzz generated by hundreds of attendees, it’s hard not to feel energized by this new but already secure UK conference.
The UK is Bitcoin No Man’s Land
But Farrington doesn’t get carried away. “Regulatory-wise, it’s pretty bleak,” he says. “I know quite a few people who have chosen not to start Bitcoin companies here. It’s not even that the regulations are bad. The problem in the UK is more just uncertainty. Nobody seems to know what you’re actually allowed to do here and how it relates to existing financial regulation.”
These lines are later repeated on stage by Alan Higgins, Chief Investment Officer of the UK’s Coutts & Co., one of the world’s oldest banks managing the wealth of high net worth investors. “It’s just not clear what we can and can’t do … it’s unclear about regulatory,” he explains. “And if we get it wrong: huge fines,” he adds, briefly explaining why even Britain’s more adventurous financial institutions are still hesitant to get involved in Bitcoin.
Allen Farrington Talking to Jason Deane on stage in Edinburgh (Photo by Bitcoms)
Btrust board member and Fedi managing director Obi Nwosu gives me some insight into why the UK’s pace of regulation is so glacial and the environment so unfriendly. From 2013 to 2021, when he ran UK bitcoin-only exchange Coinfloor, Nwosu saw “more and more sentiment around appropriate and sensible regulation coming in. But the people who are pushing for it – I’ll call them the Bitcoin progressives of the regulatory world and the political sphere – tended to eventually see that this was so powerful that they had to be a part of it. So they would leave and one by one they would join Bitcoin companies, or crypto companies. The end result is.. . you’re left with people who either don’t get it, or who get it, but have come to the conclusion that it’s a net negative. And that leads to a more hostile regulatory environment.”
Another problem is that the barely relevant UK regulation that already exists does not address the most important issues. “My big pet peeve with the regulations in general is that it’s about fighting money laundering but not really about protecting the consumer,” explains Danny Scott, CEO of UK exchange Coincorner, pointing out that major exchanges are allowed to “add every cryptocurrency and token you can think of and list them all – it’s a casino.” Scott tells me he wants to see regulations that “protect the consumer from the pump-and-dumps, the LUNAs, or those that are not legitimate companies.” You need protection from them, not from a company that buys and sells Bitcoin.
So what is the likely direction of regulatory travel? Dr Lisa Cameron, a British Member of Parliament who attended both days of the conference, chairs the All Party Parliamentary Group (APPG) on Digital Assets and Cryptocurrency. “We’ve already taken the written submissions to the group and over the next two months we’re going to have a series of oral evidence sessions,” she tells me. “Then we will put it together for some initial recommendations to the government in January, and we want to publish it in the new year.”
“It’s not Bitcoin specific,” she explains, but “an examination of the UK government’s aim to make the UK the hub for cryptocurrency… We’re going to look at CBDCs, stablecoins, and also look at best practice internationally, because . .. post-Brexit, the UK can create a tailored regulatory framework and develop its own special niche.”
While the scope of the APPG may sound overly broad and somewhat tentative, at least the Edinburgh conference gave Dr. Cameron the opportunity to discuss the issues on and off stage with Bitcoin veterans such as Samson Mow, whose new Jan3 venture aims to educate politicians and administrators. He draws the same kind of distinctions that Danny Scott would see the authorities appreciate. “I don’t think Bitcoin requires any regulation. It’s just money,” Mow tells me. “I think this is going to be the trend where Bitcoin is recognized as money, it’s not regulated, but all the cryptocurrencies will be regulated. You can also add another layer of regulation for stablecoins. So I think it’s critical to have this distinction between these three groups of things for any regulator trying to establish regulation that makes sense.”
Whether the UK’s APPG will reflect the constructive efforts of some US politicians, follow the EU’s openly hostile approach, or take a completely different track remains to be seen. But what seems certain is that – at least for the moment – the UK is a Bitcoin no-man’s land, not only from a regulatory point of view, but also a political and even a cultural point of view.
“I see the UK as caught between the US and Europe. I think the EU will move down the CBDC route and America will simply move towards Bitcoin,” Jan3’s Doogie Ewing tells me. “In the UK we’re in the middle, and I think we can go either way.”
Allen Farrington has long viewed the UK the same way: neither leaning towards nor away from Bitcoin. “I guess it could be worse, right? It could be the EU,” he says, alluding to the bloc’s openly hostile Bitcoin stance. “It’s taken very seriously in the US, I think partly because it’s a natural extension of Silicon Valley, and there’s probably nowhere in the world where freedom itself is so culturally ingrained … it’s a natural way to find Bitcoin,” he says. “On the other end of the spectrum, there’s Central America, West -Africa, Southeast Asia, where it is actually the material circumstances that push people towards Bitcoin. I had worried for a while that the UK doesn’t really have any of this. It has none of those reasons for it to take off.”
British Bitcoiners are The Ray Of Hope
But Farrington is beginning to see the outlook for Britain more positively. “What it’s going to come down to is just this kind of grassroots effort,” he says, referring to the conference. “That’s why I was so disappointed a year ago, but that’s why I’m so encouraged now.”
Danny Scott is similarly excited by what he has seen on the ground across the UK over the past six months or so. “We’ve seen quite a rise of small communities,” he says, pointing to around “30 UK meetups now starting to take shape … they’re talking about Bitcoin and trying to help increase Bitcoin adoption in their areas. Bitcoin is a community project and a community thing, so it’s nice that we’re starting to see that now in the UK.”
Obi Nwosu has noted similar positive trends. “We’ve seen this organic increase – which started to take off in 2017/2018 – continue to grow, and the grassroots support for Bitcoin among the UK Bitcoin community is getting stronger and stronger and stronger,” he says. “And it’s very interesting because any change that happens like that tends to be very tough, very strong, very hard to break. So I think the path to Bitcoin’s success is to continue to double that. Talk to regulators, try to explain, try to support their decision-making process, but not to build a strategy that depends on them.”
Doogie Ewing also sees the UK Bitcoin community as central to moving the country in the right direction. “I think it’s incumbent upon us as Bitcoiners to help raise awareness of the use case for Bitcoin, how it helps strengthen individual sovereignty,” he says. “And once we can educate people, I think the weight will come from the people to push the Bitcoin standard in the UK and target more towards America, and maybe away from CBDC which I think is coming for Europe.”
A ray of hope in no man’s land: sunshine hits a shelter in the countryside near Edinburgh (Photo by Bitcoms)
Bitcoin Collective CEO Jordan Walker echoes similar sentiments. “The conference was a huge success, but like Bitcoin, this is about the decentralized but collective effort of everyone in the space doing their part around the country to educate, inform and inspire others about Bitcoin. It gives people hope in a time of economic despair.”
The consensus is clear: if the hope of a Bitcoin-friendly UK is to be realised, a concerted effort by the country’s Bitcoiners will be essential.
The first Bitcoin Collective conference took place in Edinburgh from 21-22 October 2022. All sessions can be viewed online. The 2023 conference will take place in London.
This is a guest post by Bitcoms. Opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
