The U.K. government has revealed plans to regulate crypto exchanges and offer clear rules for stablecoin issuers and staking services by this summer.
Speaking at a fintech conference in London, Conservative MP Bim Afolami said the move would give certainty to businesses in the sector — as well as protection for more than five million Britons who already invest in digital assets.
Afolami, who is an economic secretary to the Treasury, recalled a recent discussion he had in Washington with Rostin Behnam, who chairs the Commodity Futures Trading Commission in the U.S.
Behnam had told him that "cryptoassets, particularly blockchain technology, have the potential to drive transformational change in financial markets over the next 10 years" — a sentiment the British politician agrees with.
Prime Minister Rishi Sunak has long been enthusiastic about the sector. As chancellor two years ago, he set out an ambition for the U.K. to become a "global hub" for crypto, and even wanted the country to release its own NFT.
Those plans were met with a rather tepid response, with hard-pressed consumers more concerned about inflation reaching 40-year highs.
The governing Conservative Party, which has been in power now for 14 years, has been seeking Brexit "dividends" — ways of fuelling economic growth following the country's departure from the EU. Embracing the crypto industry has been touted as once such approach, especially against a backdrop of regulatory paralysis elsewhere.
A key voice in this discussion has been Philip Hammond. He lends weight to the discussion as a former Chancellor of the Exchequer — the country's top finance minister — and now chairs Copper, which allows institutional investors to gain exposure to cryptocurrencies.
Back in January 2023 — while preparing to take on the job — he had told the Financial Times:
“The UK needs to be leading in this area post-Brexit. It’s allowed itself to slip behind. Switzerland is further ahead. The EU is also moving faster. There has to be appetite to take some measured risk.”
There's been little in the way of progress since then — and while Afolami's new push for crypto would be welcome news for exchanges and trading platforms, it may be too little, too late.
Sunak has to call an election in the next nine months, with all signs pointing to a resounding defeat. Labour, the biggest opposition party, are expected to win by a landslide. But while they've suggested they're in favor of central bank digital currencies and tokenizing securities as financial policies, crypto looks set to be far down their agenda.
