UK government eyes crypto with ‘flexible’ legislation
Little has been heard from Rishi Sunak since he lost the Tory leadership race to rival Liz Truss, now UK Prime Minister, earlier this month.
While his withdrawal from the public eye was to be expected, the departure of the former Chancellor of the Exchequer – the government’s Chancellor of the Exchequer – from government has left many wondering what will happen to his ambitious plans to turn Britain into a “global hub”. for crypto-asset technology.”
Read more: Cryptomaster Sunak meets Digital Internationalist Truss in the UK Leadership Race
Unabashedly a crypto-evangelist, Sunak clearly had high hopes for the role digital assets could play in boosting the UK economy. But neither Truss nor the new finance minister, Kwasi Kwarteng, has been particularly vocal about the topic in the past.
However, that may soon change. Following Truss’ election and Kwarteng’s appointment earlier this month, the Crypto and Digital Assets All Party Parliamentary Group (APPG) held its first debate in Parliament, discussing a range of issues surrounding blockchain technology and cryptoassets.
While no senior ministers were present – perhaps because the meeting was held on the same day as the new cabinet was formed (September 7) – the government’s representative, Chancellor of the Exchequer Richard Fuller, stated that the government will “seek ways to achieve a global competitive advantage […] as cryptotechnologies grow in importance.”
He added: “We want to become the country of choice for those who want to create, innovate and build in the crypto space […] by making this country a hospitable place for crypto-technology.”
Asked what the government’s plans were for stablecoin regulation, Fuller pointed to the proposed Financial Services and Markets Bill, which he said is more “agile” than the “more legalistic approach” taken by the EU.
See also: The UK’s Financial Services Bill will make Stablecoins a form of payment
He further noted the confidence the UK has in its regulators to work quickly and effectively to bring stablecoins within the regulatory realm, implementing “a more agile and internationally competitive set of rules that will harness the potential of [local] financial services to stimulate growth” across the country.
Anti-Money Laundering Crypto Legislation
The idea that general legal instruments create a more flexible way to regulate the crypto space than purpose-built frameworks such as the EU’s Markets in Crypto Assets (MiCA) legislation appears to be a theme of the government’s approach.
Related: EU legislator says MiCA Crypto Law could be ready in October
Fuller also pointed to provisions in the Financial Crimes (Transparency and Enforcement) bill that would give law enforcement new powers to seize and recover crypto assets.
While MPs disagreed on whether additional crypto-focused legislation is needed to protect consumers and crack down on tax avoidance, fraud and money laundering, the general consensus was that existing laws are being underutilized.
Learn more: What the UK’s economic crime bill means for the fight against money laundering
One of the more crypto-skeptical MPs present at this month’s debate, Martin Docherty-Hughes of the Scottish National Party, did not mince words on the subject: “The spies and speculators pretended they had no levers at their disposal. which has spread all the way through our economic history, has reappeared in the guise of cryptobros.
“The biggest step that the government can take to redress the balance is to enforce the law that they already have.”
See also: UK Bill will make it easier to seize crypto in money laundering cases
Economic growth and opportunities
Finally, the new government’s stance on the cryptosphere does not appear to have changed significantly. Both the financial crime bill and the financial services and markets bill were drawn up long before Truss took office – and which government not claims to be a champion of blockchain innovation and investment?
What the industry can mourn now is the loss of a vocal space advocate who showed a willingness to engage directly with UK regulators on the subject.
Kwarteng’s plan for the UK economy, to “turn the vicious cycle of stagnation into a virtuous cycle of growth,” has so far focused on cutting taxes and little else. Going forward, he will be expected to back up his rhetoric with more support for industries like crypto that help boost the local economy.
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