The appointment of Rishi Sunak as prime minister could be a fresh opportunity to set favourable regulatory conditions to promote the UK as a world-leading crypto-hub.
On Tuesday, bitcoin was unimpressed by the latest appointment in the revolving-doors of UK politics.
Bitcoin (BTC-USD) has side-stepped along the $19k mark for the past week, and ether (ETH-USD), the second-largest cryptocurrency, tip-toed in its footsteps, up only 0.3% in the past seven days to $1,344.
Crypto analysts have identified key areas where the former Chancellor of the Exchequer could boost the UK’s standing as a hub for digital assets, distributed ledger technology and cryptocurrencies.
But, before we look into the initiatives that Sunak could implement, let’s review the interest he has shown in blockchain-based industries to date.
In April, Sunak elaborated on a plan to make the UK “a global cryptoasset technology hub”, where alongside former Economic Secretary to the Treasury John Glen, he laid out a comprehensive roadmap for UK’s crypto future.
This included the development of new legislation for a ‘financial market infrastructure sandbox’ that can aid crypto-firms to innovate.
As chancellor he oversaw a Finanical Conduct Authority-led ‘CryptoSprint’ to further encourage the innovation of distributed ledger technology (DLT) within the UK.
Blockchain technology is a key method for creating the secure distributed ledger technology that is driving innovation in finance, information exchange and ‘smart’ contracts for multiple sectors of the economy.
Sunak, who was also the chief secretary to the Treasury, oversaw an initiative with the Royal Mint to create an exclusive NFT, plus the formation of an engagement group to work more closely with industry.
Earlier this year the Royal Mint stated: “As part of the chancellor of the exchequer’s ambition to make the UK a global hub for crypto-asset technology and investment.
“The Royal Mint has been asked to produce an NFT for Britain, we are delighted to once again lead the way for UK currency.”
Under Sunak’s fiscal management the UK government also confirmed that it plans to initiate a research programme to explore the feasibility and potential benefits of using DLT for sovereign debt instruments.
This also included exploring ways of increasing the competitiveness of the UK tax system to encourage growth in the cryptoasset market in the UK.
And lastly, there is Sunak’s highly promoted ‘Britcoin’ concept, which is a central bank digital currency (CBDC) project for the Bank of England.
In Oct 2021, when chairing the G7 Finance Minister Meeting in Washinton DC, Sunak launched a set of public policy principles for retail CBDCs.
Dan Ashmore, financial analyst at CoinJournal commented: The new UK Prime Minister, Rishi Sunak, is an interesting one from a crypto point of view.
As finance minister, Sunak famously ushered in the Financial Services and Markets Bill earlier this year, aiming to bring stablecoins into the UK payments system. Saying at the time, ‘It’s my ambition to make the UK a global hub for cryptoasset technology’.
In April, Sunak asked the Royal Mint to work on a UK-backed non-fungible token (NFT), with plans to issue the token by summer. The announcement was part of a broader push to make the UK a ‘crypto hub’, with several crypto-friendly officials at the Treasury and in parliament helping to advance the agenda. Officials at the Royal Mint, the UK’s official coin maker, recently confirmed plans for a government-backed NFT remain in place.
The entry of a crypto-friendly figure at 10 Downing Street could be a big win for crypto in the country. Sunak’s, who has a background in banking, appointment as PM represents a boost to crypto in the UK, from a regulation point of view at least.
Bitcoin has seen a nice price jump yesterday, creeping above the £17,800 mark. After a week side stepping at below £17k, this could hint at some initial easing of the bear market following Sunak’s appointment.
Having said that, the size of the job at hand for Sunak with regard to rebuilding the UK economy cannot be overstated. After predecessor Lizz Truss’ infamous – and unexpected – mini-budget brought the country to its knees, it is hard to imagine any drastic action being taken in the crypto space – it would seem the UK is done with surprises in the financial sector for now.
Nonetheless, a pro-crypto head of state does present a positive for the cryptocurrency industry overall, as it continues to fight for legitimacy and acceptance on the mainstream, regulated, stage.”