UK Government Eyes Crypto Opportunity With ‘Agile’ Legislation

Little has been heard from Rishi Sunak since losing the Tory leadership race to rival Liz Truss, now Prime Minister of the U.K., earlier this month.

While his withdrawal from the public eye was to be expected, the departure of the former Chancellor of the Exchequer — the government’s chief financial minister — from the cabinet has left many wondering what will happen to his ambitious plans to make the U.K. a “global hub for crypto asset technology.”

Read more: Crypto Champion Sunak Faces Digital Internationalist Truss in UK Leadership Race

Sunak was unashamedly a crypto evangelist and clearly had high hopes for the role digital assets could play in advancing the U.K.’s economy. But neither Truss nor the new Chancellor of the Exchequer, Kwasi Kwarteng, have been particularly vocal about the topic in the past.

That may soon change, however. Following Truss’ election and Kwarteng’s appointment earlier this month, the Crypto and Digital Assets All Party Parliamentary Group (APPG) held its first debate in Parliament, discussing a host of issues surrounding blockchain technology and crypto assets.

While no senior ministers were in attendance — perhaps because the meeting was held on the same day the new cabinet was formed (Sept. 7) — the government’s representative, Economic Secretary to the Treasury Richard Fuller, stated that the government will be “seeking ways to achieve a global competitive advantage […] as crypto technologies grow in significance.”

He added: “We want to become the country of choice for those looking to create, innovate and build in the crypto space […] by making this country a hospitable place for crypto technologies.”

When asked what the government’s plans were for the regulation of stablecoins, Fuller pointed to the proposed Financial Services and Markets Bill, which he said is more “agile” than the “more legalistic approach” taken by the European Union.

See also: UK’s Financial Services Bill Will Make Stablecoins a Form of Payment

He further noted the trust the U.K. has in its regulators to work quickly and effectively to bring stablecoins within the regulatory perimeter, implementing “a more agile and internationally competitive set of rules that will harness the potential of the [local] financial services to stimulate growth” across the country.

Anti-Money Laundering Crypto Legislation

The idea that general-purpose legal instruments create a more flexible way to regulate the crypto space than purpose-built frameworks such as the EU’s Markets in Crypto Assets (MiCA) legislation seems to be a theme of the government’s approach.

Related: EU Lawmaker Says MiCA Crypto Law Could Be Ready in October

Fuller also pointed to provisions in the Economic Crime (Transparency and Enforcement) Bill that will give law enforcement new powers to seize and recover crypto assets.

While members of Parliament disagreed as to whether additional crypto-focused legislation is needed to protect consumers and clamp down on tax avoidance, fraud and money laundering, the general consensus was that existing laws are being underutilized.

Learn more: What the UK’s Economic Crime Bills Mean for Anti-Money Laundering Fight

One of the more crypto-skeptical MPs present at this month’s debate, Martin Docherty-Hughes of the Scottish National Party, didn’t mince his words on the topic: “In pretending that they have no levers at their disposal, the spies and speculators who have proliferated all the way through our economic history have re-emerged in the guise of the crypto bros.

“The biggest step that the Government could take to redress the balance is to enforce the law that they already have.”

See also: UK Bill Will Make It Easier to Seize Crypto in Money Laundering Cases

Economic Growth and Opportunity

In the end, the new government’s position on the cryptosphere doesn’t appear to have shifted significantly. Both the Economic Crime Bill and the Financial Services and Markets Bill were drafted long before Truss took office — and which government doesn’t claim to be a champion for blockchain innovation and investment?

What the industry may lament now is the loss of a vocal proponent of the space who showed a willingness to engage directly with U.K. regulators on the topic.

Kwarteng’s plan for the U.K. economy, to “turn the vicious cycle of stagnation into a virtuous cycle of growth,” has so far focused on slashing taxes and little else. Going forward, he will be expected to back up his rhetoric with more support for industries like crypto that contribute to growing the local economy.

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