UK may have crypto regulation within a year, says senior minister

April 19, 2023 Coin Telegraph

The lawmaker said the regulation will need to be both “pragmatic” and “proportionate” to ensure economic growth is maximized.

The United Kingdom could lay out digital asset regulation within 12 months a British lawmaker claimed, saying the country wants to capitalize on the benefits that blockchain can bring to the private sector and economy.

In an April 17 CNBC interview, Andrew Griffith, the economic secretary to the U.K. Treasury said the long-term vision is to “let firms make the most of the opportunities from crypto assets” with sound crypto regulation.

For the first time in “decades,” Griffith claimed the U.K. government is now well-positioned to regulate crypto in a “pragmatic” and “proportionate” manner and appeared to make reference to the U.K.’s exit from the European Union:

“I think over the next 12 or so months is the window. We've got this great asset in the U.K., we've got control back of a rule book — not something the U.K. has had for decades — so we've got the ability to move in an agile and proportionate way.”

It led the lawmaker to assert that the U.K. is now in a “growth” mindset to maximize the economic efforts brought by tech innovation in the private sector.

Griffith explained the crypto regulatory framework would mix existing financial asset laws with new crypto-specific rules.

“Wherever possible we want to see the same asset regulated in the same way, but there are some additional opportunities in the crypto asset or distributed ledger space and we want to take advantage of that.”

He cited settlement using fiat-backed cryptocurrencies as an example which was included in the financial services bill. “So that's coming even sooner than the broader regulatory framework,” he added.

Griffith said a potential rollout of the U.K.’s proposed central bank digital currency (CBDC) — nicknamed “Britcoin” by the public — has a much longer “lead time” and therefore won’t be seen within the next year.

Griffith added he wants to see a policy debate regarding privacy and the technology of the digital pound “thrashed out” to ensure that all concerns are addressed:

“If you're going to have a sovereign digital currency you've got to have the highest level of resilience and infrastructure, so that's not going to happen overnight.”

Brian Armstrong, the chief of crypto exchange Coinbase, met with Griffith earlier this week while he was in London to give a speech on how the U.K. could “turbocharge” its crypto sector and ultimately become an "innovation hub for the Web3 economy.”

Great meeting today with UK Economic Secretary and City Minister @griffitha.

The UK is moving fast on sensible crypto regulation to both drive economic growth AND consumer protection. Excited to keep investing in the UK. pic.twitter.com/478PQSLmDe
— Brian Armstrong (@brian_armstrong) April 17, 2023

Coinbase's crypto hub aspirations for Britain are in line with the views of prime minister Rishi Sunak who explained last year while serving as finance minister that he would like to see the U.K. become a crypto hub.

Dubai, Singapore and recently Hong Kong are some regions that have made pushes to become crypto hubs.

The United States, on the other hand, has considerably stepped up crypto-related enforcement action since Gary Gensler was sworn in as chair of the Securities Exchange Commission in April 2021.

Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say? – Cointelegraph Magazine

Coinbase to help UK on Web3 hub as Treasury reportedly revives blockchain taskforce

April 18, 2023 Coin Telegraph

Brian Armstrong

Brian Armstrong will give suggestions to the U.K. on regulations, taxes and ensuring collaboration between the banking and FinTech sectors.

The United Kingdom could "turbocharge" its crypto sector and be an "innovation hub for the Web3 economy" as part of a vision laid out by cryptocurrency exchange Coinbase.

The comments by the exchange coincide with an April 17 Sky News report that the U.K. Treasury is set to revive the Asset Management Taskforce with a focus on developing crypto regulation in collaboration with the private sector.

In an April 16 blog post, Coinbase emphasized the firm is working “seriously” in the U.K. and Europe. It praised the progressive regulatory efforts taking place in the region and added its CEO, Brian Armstrong, will speak at a London FinTech conference and provide nine recommendations on how the U.K. can "cement its place" as a Web3 hub.

“The U.K. has been one of our fastest-growing user markets, and the E.U. is this week set to adopt the Markets in Crypto Assets (MiCA) regulation, which will bring in a new licensing regime across the 27 member states,” the post reads, adding:

“In short, things are happening in Europe that are edging the region ahead and, when it comes to embracing the digital economy, the region is preparing for a seismic change in how it uses and thinks about money.”

The post also included a brief rundown of Armstrong’s nine recommendations for the U.K. government.

The list includes ensuring collaboration between the banking and FinTech sectors, developing a cross-departmental strategy for tech innovation and economy digitization along with quickly establishing a regulatory framework for crypto.

Additionally, topics such as developing “a regulatory framework that promotes stablecoins,” providing clarity on tax treatment for crypto assets and creating a plan to “bring de-centralized ID (DiD) to fruition,” were also outlined by Coinbase

Leading up to his April 18 speech, Armstrong revealed via Twitter on April 16 that he met with the U.K.’s Economic Secretary and City Minister, Andrew Griffith.

The Coinbase CEO stated that he raised concerns over the de-banking of some crypto firms in the U.K. and the negative implications of the 24-hour “cooling off” for investments in financial product promotions that came into effect under the “Financial Promotion regime” in February.

A few points we shared:

1. Some UK banks are blocking fiat payments to crypto companies which is not ok.
Good fraud controls make sense, a blanket ban does not (and is likely not lawful). Needs further education and collaboration.

2. The Financial Promotion regime goes too far…
— Brian Armstrong (@brian_armstrong) April 17, 2023

UK Treasury to revive Asset Management Taskforce

Under the guidance of City Minister Griffith, the Treasury will soon revive the Asset Management Taskforce according to a report from Sky News U.K.

The Asset Management Taskforce was initially established in 2017 and was designed to encourage greater communication between the government, the FinTech and crypto sectors and the local financial regulator the Financial Conduct Authority (FCA).

It appears the body has been relatively inactive over the past couple of years.

However, Sky News claims that talks will take place this week between the Treasury, FCA, fund management bosses and other stakeholders as the government looks for ways to bolster the local crypto asset sector.

Notably, on April 17 Griffith spoke on the first day of the UK FinTech Week conference in London and emphasized the government is focused on “fostering innovation by making the U.K a safe jurisdiction for crypto asset activity.”

“We set out plans in our wide-ranging consultation published in February, and we want to proactively support the use of distributed ledger technology and tokenization where it makes sense,” he said.

UK’s digital pound would modernize payments but won’t replace cash: Minister

February 7, 2023 Coin Telegraph

Bank of England

Finance minister Jeremy Hunt says the digital pound, or "Britcoin" would be issued and backed by the Bank of England, but won't negate the use of cash.

The Bank of England (BoE) and U.K. Treasury are gearing up plans to create a digital currency that could "provide a new way to pay" without necessarily replacing cash.

On Feb. 7, a joint consultation paper on Central Bank Digital Currencies (CBDCs) is set to drop, with the BoE and Treasury seeking feedback on how, and if they should proceed with building a CBDC.

In a Feb. 6 public statement, Finance Minister Jeremy Hunt indicated that the two entities would seek to develop a modernized digital payments system that doesn’t necessarily negate the use of cash.

"While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that’s trusted, accessible and easy to use," he said, adding that “we want to investigate what is possible first, whilst always making sure we protect financial stability."

Another key area of focus will be to provide a government-backed alternative to privately issued stablecoins, with officials from the BoE and treasury expecting big tech companies to develop such in the coming years.

As part of the statement, BOE Governor Andrew Bailey emphasized that a “digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability.”

“However, there are a number of implications which our technical work will need to carefully consider. This consultation and the further work the bank will now do will be the foundation for what would be a profound decision for the country on the way we use money.”

BoE Deputy Governor Jon Cunliffe is also set to give a speech on Feb. 7 to update the finance industry on the bank and treasuries’ CBDC work so far.

If they decide to move forward, it was suggested that the Digital Pound and its underlying blockchain-based system would not be built until at least 2025.

In April 2021, current Prime Minister and former finance minister Rishi Sunak directed the BoE and Treasury to collaborate and form the Central Bank Digital Currency Taskforce. Essentially the duo are tasked with overseeing the study and potential implementation of the Digital Pound.

While it appears to have been a slow burn so far, given how cautious the bank and treasuries stances are, the latter did post a job listing to LinkedIn on Jan. 24 calling for a team lead for its Payments and Fintech Team of roughly 20 people focused exploring on a “potential digital pound.”