Many are excited by a new bill that has recently passed through the House of Commons, and what it means for the UK in terms of becoming a significant crypto hotspot over the next few years.
The bill, which was tabled when the current Prime Minister Rishi Sunak was still the Chancellor, has meant that cryptocurrencies have been legitimised as regulated financial instruments, with Bitcoin being recognised as a commodity.
A lot of people want more regulation
Despite many believing that there is currently more than enough regulation in the crypto space, there are many who believe that the industry requires far more.
Many industry giants such as Mike Novogratz, Kevin O’Leary and Raoul Pal have called for far more regulatory clarity, and believe that more regulation will invite a “wall of money” to come into the space, in the form of institutional capital.
What does it say in the bill?
The current context of the UK is such that the high levels of debt mean that the government is currently incentivised to try and grow the economy as quickly as possible. The most important sector in contributing to GDP is currently the quarternary sector, and the bill fully recognises this, and the importance of cryptocurrencies in growing the UK economy.
As such, the bill proposes:
“A range of measures to maintain and enhance the U.K.’s position as a global leader in financial services, ensuring the sector continues to deliver for individuals and businesses across the country.”
The bill moves away from “digital assets” as a form of terminology, in favour of “digital settlement assets”, and highlights the importance of stablecoins in terms of being able to dramatically improve payment rails, particularly when it comes to cross-border payments.
UK Government seeks to include crypto as a regulated activity in its latest amendment bill pic.twitter.com/pfdkNczmgH
— Blockworks (@Blockworks_) October 21, 2022
The bill is intended, first and foremost, to provide greater clarity to the industry, and to highlight was is legal and what isn’t in order to try and attract investment from around the globe, and to establish the UK as an international hub for innovation in the crypto space.
Sunak’s support for CBDCs
However, there are many who remain concerned and have not had their concerns dissuaded by this bill, particularly in light of the new Prime Minister Rishi Sunak’s support for Central Bank Digital Currencies (CBDCs).
Rather than embracing much of the innovation that the crypto space has witnessed over the past decade, many believe that CBDCs would be a step backwards given that the only changes they provide when compared to the current system are that they further centralise the creation of money, destroy any potential for privacy, and create a dystopia.
The values espoused by those who support CBDCs are often far in contrast with those who support the values of Bitcoin. Notably decentralisation, immutability, and the removal of third parties.
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