The United Kingdom is currently working on revamping its financial sector with a series of regulatory reforms aimed at boosting the country’s economic growth. The new overhaul includes 30 regulatory guidelines to bolster the UK’s financial services industry, including the digital asset industry.
Unpacking The New Model
Jeremy Hunt, Chancellor of the Exchequer, has released a 30-point restructuring framework known as the Edinburgh Reforms, aimed at “turbocharging the economic growth” of the UK.
In addition, the move is geared toward pushing the UK’s financial ecosystem to be more innovative, pumping more money into investment in crypto businesses, and boosting blockchain development.
Furthermore, UK authorities are committed to setting up a consultation on the establishment of a central bank digital currency (CBDC). With this, the Treasury and the Bank of England (BoE) will thrive on exploring the use cases for the digital pound as many countries continue their efforts in building their national digital currencies.
Meanwhile, the crypto space is getting some breather from the government. The Investment Management Exemption Act encourages offshore investors to plunge funds into the UK digital asset market.
This shows a recommitment from the government after its previous stance against crypto transactions. Moreover, the government has renewed its commitment to the Financial Markets Infrastructure Sandbox to accelerate the decentralized ecosystem.
Thus, companies can explore decentralized technologies in a regulated manner. The regulators will launch the Sandbox platform next year.
The new regulatory package also includes consumer protection in emerging technologies, with the government considering amendments to the 1974 Consumer Credit Act to enhance innovations and save costs.
The Rishi Sunak Effect
UK’s first Asian-descent prime minister assumed office with a vision to make the country a global hub of crypto-related activities. Rishi Sunak has pledged to deliver “Digital Britain,” which will likely kickstart the already halted digital finance innovation strategy and drive future economic productivity.
The former Wall Street banker comes with a wealth of experience from his journey in the global financial ecosystem. He is now about to face his most difficult challenge in government as the new prime minister.
Britain is currently in its worst economic period in decades. Therefore, Sunak’s emergence has brought renewed confidence to the traditional finance marketplace and the UK’s crypto space.
Following the downward slump in Britain’s fintech industry, London’s claim to become a global digital finance hub is at stake. As a result, key industry players want Sunak to include crypto assets in the regulated financial sector.
The new Financial Services Bill to be passed in July 2023 has included such a demand. In addition, the country’s Law Commission is proposing legal reforms, including digital asset ownership.
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