UK Member of Parliament and experts in the financial industry recently discussed the benefits and risks of supporting the growth of the UK crypto market. MP Andrew Griffith, who is also the economic secretary to the Treasury, said that the government would support the technology behind cryptocurrencies.
UK wants to be a global crypto hub
Griffith said that multiple forecasts in the market showed the benefits the UK economy would have if it embraced crypto assets and the underlying technology. He further said that government policy was needed to give credibility to the crypto industry.
The objective of the UK government was to promote the country as a hub for well-regulated technology advancements, including crypto. However, he opined that the events in 2022 demonstrated the vulnerabilities in the space and the practices adopted by some early entrants in the sector.
The legislator also noted that the UK needed to make the most out of new technologies while ensuring a solid regulatory framework would protect consumers. Moreover, the government needed to develop a regulatory response that would not inhibit the growth of this sector.
Griffith further opined that the UK also wanted to ensure that consumers had access to the right information. This would be achieved by creating laws regulating the promotions done by crypto firms. He noted that this would ensure that consumers have more protections.
He also addressed stablecoins and a UK central bank digital currency, saying he was championing the monitored use of wholesale stablecoins. The government, alongside the Bank of England, will release a consultation paper on a UK CBDC that also touches on regulating the crypto asset space.
Griffith did not mention when the consultation paper would be released but said it would come in “weeks, not months.” The UK is competing against Europe, paving the way in crypto regulations following the Markets in Crypto Assets (MiCA) bill.
Crypto regulations in the UK
UK’s Prime Minister, Rishi Sunak, has in the past said that he supported the UK being a hub for digital assets and distributed ledger technology. In April last year, Sunak came up with a plan to make the UK a global crypto hub by formulating a roadmap for the crypto industry in the country. One of Sunak’s proposals was a sandbox program to support crypto innovation.
Sunak also worked with UK financial market regulator, the Financial Conduct Authority (FCA), to encourage distributed ledger technology innovation in the UK. While the support for cryptocurrencies by regulators has not been smooth, DLT technology continues to attract attention because of its potential to transform the financial industry.
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Sunak was also in charge of a project at the Royal Mint to release an exclusive non-fungible token (NFT). He also worked on creating a group that would work closely with the industry to support engagements with the government.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.