As the UK’s new Prime Minister, Liz Truss has certainly inherited a very full ‘to do’ pile. As well as focusing on the cost of living crisis, there’s the war in Ukraine, the NHS on its knees and a whole host of other issues that need addressing. Alongside this, there is the whole area of cryptocurrency and blockchain to deal with. As a growing industry, there has been significant harm caused to some investors (take Luna as an example) and this has led to more people calling for regulation.
Many people working in the crypto industry in the UK are anxiously awaiting what Liz Truss’ views on crypto are, and what her cabinet appointments could mean for crypto. It would seem she is pro-regulation, as she has shown by appointing Michelle Donelan to head up gambling reform. Donelan has said she is keen to address regulating the gambling industry and the best slot sites quickly, which could spell trouble for crypto in the UK. However, there are also those who believe that imposing greater regulation would actually benefit the industry by boosting the confidence of investors.
So, what can we expect from Truss? Looking back, she’s already hinted at where she’d like crypto to go and we believe that there are reasons to believe that Truss will champion the cause of digital assets.
What has Truss previously said about crypto?
While regulation could well be a double-edged sword when it comes to crypto, an old tweet from Truss has come to light suggesting that she may well be against stiffer regulations anyway. As chief secretary to the Treasury in 2018, here’s what she had to say about crypto at that time:
“We should welcome cryptocurrencies in a way that doesn’t constrain their potential. Liberate free enterprise areas by removing regulations that restrict prosperity.”
Truss’ support doesn’t seem to end there. As UK secretary of state for international trade, she also made reference to blockchain technology. This came up during a debate in the House of Commons where UK and US trade was being discussed. Truss made clear that she saw the benefits that blockchain had to offer and saw both the UK and the US embracing this technology and becoming world leaders in it.
The exit of crypto firms
Over the last few years, the UK has seen numerous crypto companies leaving and heading elsewhere. This has been down to the fact that they had failed to adhere to Financial Conduct Authority (FCA) regulations in terms of money laundering. The number of firms that have exited has led many people to fear that the UK would slip in the ranks when it comes to being a leader in financial innovation.
With Liz Truss now in the top job, there is a sense that she could perhaps bring fresh opportunities. With the introduction of favourable regulatory controls, there is no reason why the UK could not go on and become the world leader in all things crypto.
There are analysts who have confidence that the UK is already well equipped to be the world’s crypto hub. The opinion is that we already have one of the best regulatory frameworks in terms of finance and that this would just require tweaking to meet modern needs. This means that the UK has no need to start from scratch and it can ensure that any regulations aren’t there to stifle the crypto industry.
The reasons why Truss will lead the UK to the fore
There are numerous points to consider that strongly suggest that Truss will take crypto, embrace it and take the UK to the forefront in terms of innovation. Here’s a look at just some of those points:
The Cryptosprint conference
While the FCA may have been viewed as damaging the crypto industry before, it hosted this conference and surprised a fair few people. Whereas many had viewed the FCA as being anti-crypto, it instead voiced its concerns but then discussed in detail the approach that it would take to any regulation. There was certainly nothing to suggest that such regulation would put a stranglehold on crypto and the two-day meeting left people feeling positive about the future.
Blackrock and institutional investments
As an American investment company, Blackrock is using a UK crypto firm for its institutional investments. Blackrock already has a partnership with Coinbase and this is allowing its clients to be exposed to all that Bitcoin has to offer. Blackrock needs a way to index bitcoin securely and accurately. It opted to use the UK-based firm, CF benchmarks to do this. While this is good news for a UK company it also shows that crypto has hit the mainstream and no country can afford to ignore it.
Stablecoins in the UK
Back in July 2022, there was an announcement for the UK Treasury saying that it was looking to regulate certain types of stablecoins. This would allow them to be accepted as a form of payment. The majority of stablecoins are pegged to the US dollar. However, July also saw the launch of the first one that is backed by GBP. This digital asset is known as the Great British Pound Token, or simply GBPT.
The popularity of crypto in the UK
There is research that shows that the UK is ranked number three in the world when it comes to crypto usage. The same research revealed that around 5% of the UK’s population has been exposed to cryptocurrency trading to some degree. The UK has also started to see businesses coming to light that accepts crypto as a form of payment. While there may only be 23 right now, this is a number that’s set to increase.
It appears that Truss lacks the desire to get in the way of all that crypto has to offer. Yes, we can be sure that there will be a degree of regulation, but Truss is clear in that she refuses to stunt its growth as she aims to make the UK a crypto hub.