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Here Are Rishi Sunak’s Most Urgent Crypto Tasks as UK Leader

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(Bloomberg) — UK Finance Minister Rishi Sunak has outlined an ambitious plan to make the UK a cryptocurrency hub. As prime minister, he will be under pressure to deliver on that promise and at the same time contain the economic crisis.

Cryptocurrency executives and investors interviewed by Bloomberg News welcomed Sunak’s appointment with cautious optimism. But they also said the political turmoil in the UK in recent months has increased the urgency to develop a comprehensive regulatory regime for the sector.

Sunak has taken a major step towards alleviating industry concerns by appointing John Glen, formerly the de facto king of digital assets, as Chief Secretary to the Treasury Department. But jurisdictions from Japan to his EU have tightened their regulatory regimes over the past few months, putting the UK at a competitive disadvantage.

Jamie Burke, founder and CEO of London-based venture capital firm Outlier Ventures, said: However, the government must take “aggressive action to provide effective and timely regulation to the sector” in order to regain its lost position.

According to cryptocurrency executives, the most urgent areas Sunak must address are:

Regulatory clarity

Many of the more than half a dozen entrepreneurs, investors and analysts interviewed said complex messages from authorities on cryptocurrencies are hampering Sunak’s ambitions.

In April, the day Glenn declared the UK “open to crypto business,” Bank of England Governor Andrew Bailey described digital assets as the new “frontier” of criminal fraud.

Marieke Flament, CEO of the NEAR Foundation, which oversees the development of the NEAR protocol, said: “The UK government is both a supporter and a critic of the digital asset industry.”

Faster registration

Industry officials also said some companies have demanded a faster registration process with the UK’s financial watchdog in recent years after leaving the UK without meeting the Financial Conduct Authority’s standards on anti-money laundering. increase.

“Sunak needs to ensure that the FCA takes a more agile and pragmatic approach to crypto regulation,” said Highlander Misra, chief executive of market infrastructure firm GMEX Group. “Even established companies with other licenses are frustrated by the time it takes to get regulatory approval and are moving to other jurisdictions as a result.”

Stablecoins and digital pounds

Mikkel Morch, chairman of cryptocurrency fund ARK36, said: “Regulating stablecoins in a way that does not impede their innovative potential or impede the UK’s competitiveness in this space is no longer possible. It should be one priority area.”

The new stablecoin regulation will form part of the Financial Services and Markets Bill. This is a sweeping post-Brexit reform of the UK financial services industry aimed at making the City of London more competitive. The bill, which has not yet been passed by lawmakers, proposes to regulate certain types of stablecoins as payment methods.

Another area under scrutiny is the development of digital currencies. Sunak has announced a joint HM Treasury and Bank of England task force to explore the benefits and risks of the digital pound in 2021. Next steps include consultations through the end of the year to help assess the central bank digital currency (CBDC) case.

The introduction of the digital pound will provide a platform for innovation, said Jannah Patchay, policy lead for the Digital Pound Foundation. This will “ultimately enable the UK to remain at the forefront of the increasingly competitive global financial markets and fintech environment,” he added Patchay.

©2022 Bloomberg LP

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