Markets reflect a positive sentiment after Rishi Sunak was sworn in as the new British PM.
While Sunak indicates expenditure cuts to lead fiscal recovery, much delivery is expected out of him to turn the UK into a ‘crypto hub’ as promised.
Can Rishi Sunak deliver on his crypto promises?
Earlier in April, the UK government had made a series of crypto proposals with Rishi Sunak leading the brigade as the Chancellor of the Exchequer, alongside former Economic Secretary to the Treasury (Sept. 2021- July 2022), John Glen.
Sunak had noted his ambition to make the UK a global hub for crypto asset technology while ensuring that “firms can invest, innovate and scale up in this country.” He added that Glen confirmed more comprehensive regulatory consultation with the government around the crypto sector before the end of 2022.
Now, with the reappointment of John Glen as the Chief Secretary to the Treasury on 25 Oct. 2022, the crypto market has reasons to cheer.
Jamie Burke, founder and CEO of UK-based venture capital firm Outlier Ventures, told Bloomberg, “This change in leadership could prove crucial in achieving the aspirations which were set out earlier this year around transforming the U.K. into a globally recognized financial hub,”
Still, Burke cautioned that a “proactive action to provide effective and timely regulation for the sector” has to be implemented in time.
In a speech on Nov. 9, 2020, Rishi Sunak also suggested that stablecoins and central-bank digital currencies would offer more effective payment processing networks. In the meantime, Britain is pushing crypto assets regulations before the parliament.
New policies amid EU push to MiCA
On Oct. 27, Andrew Griffith, Sunak-appointed City Minister, laid down the amendment to the financial services and markets bill before the parliament.
The parliamentary memo stated, “This new clause amends the Financial Services and Markets Act 2000 to clarify that the powers relating to financial promotion and regulated activities can be relied on to regulate crypto assets and activities relating to crypto assets. Cryptoasset is also defined, with a power to amend the definition.”
Additionally, with members of the House of Commons voting in support of the plan, the proposal may soon become law. And with the European Union close to approving landmark crypto rules under MiCA, Rishi Sunak is expected to speed up work in some key areas.
In a report based on the domestic crypto industry’s priorities, clear guidelines are definitely at the top. Marieke Flament, CEO of the NEAR Foundation, told Bloomberg:
“The U.K. government has been both proponent and critic of the digital assets industry,” advocating for clear rules.
Another task for Rishi Sunak, per the crypto industry’s executives, is to fasten a licensing process for businesses operating in the digital asset sector.
Recently, digital bank Revolut was added to the UK Financial Conduct Authority’s (FCA) list of registered crypto firms after several firms with temporary registrations faced the watchdog’s deadline this year. Top UK executives also want stablecoin policies that won’t impede the region’s competitiveness in the market, according to Bloomberg.
With Rishi Sunak known to advocate for the crypto market, the Treasury and the Bank of England have been exploring the viability of a prospective UK CBDC amid the push for more stablecoin regulations.
Notably, in a speech published this week, Bank of England Deputy Governor Sam Woods also said:
“Fintech, stablecoins and the like will only make a positive contribution to the economy if they can operate in a stable, high-confidence environment,” indicating legislative changes to harness the technology.