London, February 11 – Despite the cold winter of the cryptocurrency market following the collapse of recent months, the UK is accelerating its plans to leverage its post-Brexit regulatory independence and transform the City of London into a a global hub for crypto assets.
The so-called Edinburgh Reform, the UK government’s roadmap to permanently separate itself from European Union (EU) financial services regulation, proposes a legal framework for cryptocurrency-related activities that focuses on promoting innovation and attracting investment in an industry that promises billion-dollar profits.
In recent days, the Ministry of Economy has also launched a consultation process to develop a “global leader regime” in the sector, which protects investors and at the same time contributes to the flourishing of lending activity. ‘cryptographic assets, precisely one of the areas that triggered the current crisis.
For London, the market collapse in 2022, which evaporated the funds of millions of investors, is another step in the birth of a new sector.
Andrew Griffith, Secretary of State for the City and Chief Financial Officer at the Department of Finance, compared the cryptocurrency crash to the bursting of the bubble of early internet-connected businesses in the late 1990s.
“It’s probably inevitable that in an emerging and disruptive industry there will be people who have made money and people who have lost it. It’s not unusual. It was like that in the early days of Internet, just as it was in the early days of steam trains,” Griffith described to the House of Commons Treasury Committee
Under his leadership, the United Kingdom aspires to legalize as a valid form of payment what are known as stablecoins, private assets whose value is generally linked to that of traditional currencies such as the dollar, the pound and the euro.
At the same time, the Bank of England is exploring the possibility of creating a digital pound sterling, already dubbed Britcoin by the press, which would act as a stablecoin backed by the public treasury, a possibility the European Central Bank is also considering. to (BCE).
OUTSIDE EU
With its legislative proposals, which the main firms in the sector have welcomed, the United Kingdom is trying to go beyond the Crypto Asset Markets Act (MiCA) that Brussels has already put forward.
“A lot of details have yet to be worked out in the UK, but the UK and EU regimes are likely to differ in various areas,” Conor Macmanus, director of financial services law analysis at consultancy PwC, told EFE. .
“The European Union has created an independent framework for crypto assets, while the United Kingdom wants to modify the financial services regulations that already exist” to integrate them with the rest of traditional assets, underlines the analyst.
London’s plans “cover lending and decentralized finance (DeFi), areas that are not currently included in the European Union regime,” says Macmanus, who stresses that the plan will support the viability of the industry in the future. long term.
“Complying with legal requirements will require investment from industry, but it will increase the resilience of businesses and their operating models, which is essential,” he adds.
Asked about the attractiveness of the City in the global cryptocurrency landscape, the PwC expert warns that favorable regulation is only one of the necessary ingredients.
“There are many factors that determine the success of a financial center, regulation is key, but there are others that are also important, such as the ability to attract talent,” he warns.
WELCOME WITH OPEN ARMS
Binance, one of the world’s leading crypto asset exchanges, welcomed the proposals.
“We strongly believe that a stable regulatory framework helps drive innovation and is essential for building trust,” a company spokesperson said.
Coinbase, another of the big exchangers, which is listed on the New York Stock Exchange, for its part celebrated that the British government has turned its “political ambitions” into “specific regulatory proposals”.
“It’s great to see how Andrew Griffiths provides the legal clarity we need to innovate,” said Faryar Shirzad, a former member of the United States National Security Council as a financial adviser and current chief strategy officer at Coinbase.