A new research shows cryptocurrencies are not yet popular among Britons. But the government is not wasting any time in defining a proper regulatory framework. Let’s take ride to explore what the UK is doing to seize the opportunity to become a global crypto hub.
Today, March 7, 2019, the Financial Conduct Authority (FCA), UK’s financial watchdog, has released a research focused on the UK consumer attitudes towards cryptocurrencies.
According to the research, which consisted of qualitative interviews and a nationwide survey, 73% of the surveyed UK consumers don’t understand the term ‘cryptocurrency’ and aren’t able to define it. Also, only 3% of responders had ever bought cryptoassets.
This study is not an isolated effort. It follows a FCA consultation paper titled “Guidance on Cryptoassets” released by the regulator earlier this year.
The paper’s goal is to shed light on existing cryptocurrency regulation for market participants. In other words, “help them to understand whether the cryptoassets they use are within the regulatory perimeter.”
Once the consultation period ends in April 2019, the FCA is set to offer a policy statement with ultimate guidance on this matter.
Clear information on crypto regulation is expected to serve well both investors and companies. The paper states that the UK is not yet a strong location for crypto trading, but it points out at a positive trend in the area of fundraising via Initial Coin Offerings (ICOs) and other crypto-related methods.
Another distinctive detail outlined in this document is that no major high street or online business accepts crypto payments directly. The FCA paper shows that “Less than 600 independent shops, bars and cafes around the UK accept Bitcoin.”
The FCA is not the only institution in the UK taking steps to ensure higher governance in the cryptocurrency market. Back in March 2018, Philip Hammond, the British Finance Minister, announced the creation of a special task force focused on crypto assets.
Chancellor Hammond said at the time:
“The initiative is part of a larger collective fintech sector strategy; one which will help the UK to manage the risks around crypto assets, as well as harnessing the potential benefits of the underlying technology.”
This investigatory task force is integrated by representatives of the Bank of England, the Treasury and, of course, the Financial Conduct Authority. Its creation was not random act.
British lawmakers have been urging the government to take a stronger position in the cryptocurrency market - one that mainstream media referred to as “Wild West” due to its volatility, security inconsistencies and a relatively low customer protection.
The Parliament’s Treasury Select Committee has recently described the official approach to this market as vague and unsustainable, calling for rules to protect people and combat illegal activities potentially associated with cryptocurrencies.
“It’s unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting,” the committee’s chair Nicky Morgan stated.
In this line, British minister John Glen MP expressed that the UK government remains “agnostic” on cryptocurrencies and it is still trying to figure out “the right level of regulation”.
While lawmakers emphasize the need for serious regulation, they also believe that a proper legal framework could turn the UK into a global hub for cryptocurrencies.
Brexit - Opportunity or Threat?
The divorce between Great Britain and the European Union is not to be taken lightly in any sense, specially when talking about its financial and regulatory impact.
As far as the cryptocurrency market concerns, an independent United Kingdom offers multiple opportunities in the regulatory field. While keeping policies aligned with Brussels could soften the negotiation of a favorable divorce deal, lawmakers might instead prioritize rules that potentially support the booming technological environment in the country.
For the moment, everything indicates that the cooperation on blockchain and cryptocurrency between the UK and EU remains intact. Last year, the British government and 21 other nations signed up for the creation of the European Blockchain Partnership - a commitment to share Blockchain experience and expertise across the ‘Old Continent’.
Moreover, HM Treasury has expressed its willingness to follow the EU’s Anti Money Laundering Directive to digital assets to guarantee a higher consumer protection and ensure that criminal activity does not undermine legitimate uses of cryptocurrencies.
Top Universities Go All In On Blockchain
Taking into account the risks posed by the lack of proper educational resources available on cryptocurrency and blockchain technology, Oxford University - one of the world’s most prestigious universities - has launched its own online Open Course.
London Business School is also offering executive education in this field. This new field in education is gaining momentum worldwide. Similar programmes are now available in the US, Canada and other European countries.
Cryptocurrencies and blockchain will be pivotal in revolutionising financial services, government operations, health, insurance and plenty of other sectors. But this can only be realised with healthy, workable regulations in place. Frameworks that protect both customers and entrepreneurs, and don’t stifle innovation. The UK is likely moving in the right direction.
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