- On 4 April 2022, the UK Government announced its move to recognise stablecoins as a valid form of payment as part of wider plans to make Britain a global hub for crypto asset technology and investment.
- Document from September 2022 shows UK Government Holds Talks with Ripple on Crypto Regulations and XRP Adoption
- June, 2023, the UK passed the Financial Services and Markets Bill after approval from King Charles.
On 4 April 2022, the UK Government announced its move to recognise stablecoins as a valid form of payment as part of wider plans to make Britain a global hub for crypto asset technology and investment.
Back then Chancellor of the Exchequer, and now Prime Minister Rishi Sunak said:
It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.
We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.
A little over a year later, June 2023, the United Kingdom has joined the growing ranks of countries that have implemented official regulations for cryptocurrencies and digital assets, positioning itself ahead of the United States in terms of acceptance.
Despite having a smaller user base compared to the US, Great Britain and Northern Ireland have taken a significant step towards embracing the potential of cryptocurrencies.
This move came with the passing of the Financial Services and Markets Bill (FSMB), which received Royal Assent from King Charles on Thursday. With this bill in effect, cryptocurrencies will now be recognized as regulated financial activities, subject to established market regulations.
Andrew Griffith, the Economic Secretary to the Treasury, hailed this development as a landmark piece of legislation that grants the UK control over its financial services rulebook. Additionally, the bill carries new powers that have emerged as a result of Brexit, with the potential to unlock around £100 billion for productive investment and foster economic growth and innovation within the country.
Beyond recognizing crypto as regulated financial assets, the FSMB lays the foundation for advancing the blockchain sector and brings several key provisions, including:
1. Enhanced scrutiny of financial services regulators to ensure accountability, democratic input, and transparent oversight.
2. Removal of unnecessary restrictions on wholesale markets, aligning with the outcomes of the Wholesale Markets Review.
3. Protection of free access to cash through legislation and introduction of essential safeguards for victims of Authorised Push Payment scams.
4. Enablement of crypto asset regulation to support secure adoption within the UK.
5. Establishment of “sandboxes” that facilitate the use of emerging technologies like blockchain in financial markets.
With the approval of this bill, the United Kingdom aligns itself with the European Union (EU), which was among the first major administrations to regulate cryptocurrencies through the EU Markets in Crypto Assets (MiCA) bill. The influence of this EU law can already be observed, as demonstrated by German software giant SAP’s recent selection of the stablecoin USDC (USD Coin) for cross-border payments.
This places the UK ahead of the United States, which according to Securities and Exchange Commission (SEC) Chair Gary Gensler, is still years away from establishing comprehensive regulations for cryptocurrencies. This development raises concerns, considering the US boasts a user base of over 54 million as of 2023, almost double that of the UK with 31 million users.
UK Government Holds Talks with Ripple on Crypto Regulations and XRP Adoption
The US could potentially face the risk of losing its user and developer base if it fails to adopt more supportive policies. Recent instances, such as Coinbase opting for friendlier regulatory environments, highlight the potential implications. Furthermore, with the SEC’s ongoing clashes with major crypto exchange Binance and payment network Ripple (XRP), the vulnerability of the US crypto industry becomes more apparent.
According Twitter blog xrpnews.crypto Ripple has been having discussions with the UK government since September 2022 regarding crypto adoption and its “potential benefits to the country’s economic and financial standing”.
Crypto Could bring a Competitive Edge to the UK Tech Sector
With the governments proactive steps towards cryptocurrency regulation, the UK could establish itself as an attractive destination for crypto businesses and investors. This move clearly signals the country’s dedication to nurturing innovation and advancement in the blockchain industry and sets it apart from its transatlantic counterpart, at least for now.
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