British Prime Minister Seeks to Advance Global Crypto Investment as Opponents Decry Risk
With all the negative issues that cryptocurrencies have had to weather in the past few years, it’s a wonder that they are still around at all. Going from the FTX disaster and the egg that ended up all over several celebrity faces who endorsed Samual Bankman-Fried’s game of musical crypto chairs, to this surprising invitation from Great Britain.
When it comes to crypto trading perhaps the catchphrase for 2023 could be “Head East, Young Investor, Head East” to London, perhaps. In an article this week from Joel Khalili written for wired.com, we find the Prime Minister of England actually embracing what he calls crypto refugees from America.
The UK’s prime minister, Rishi Sunak, announced a plan to make the country “a global crypto-asset technology hub” through regulations that would “give [crypto companies] the confidence they need to think and invest long-term.”
Crypto, Sunak said, was “the business of tomorrow.”
Since then, both crypto and the UK economy have plunged from their peaks. In July 2022, Sunak quit as chancellor, helping bring down his boss, then prime minister Boris Johnson. The UK is now on its third leader and fourth chancellor in under a year, after a disastrous “fiscal event” in September 2022 that created a £60 billion ($76 billion) deficit in the national budget. Economic growth has leveled off, as prices rise and wages stagnate.
At the same time, crypto has slumped. The meltdown of the Terra-Luna stablecoin in May 2022 sent the industry into a spin that led to the failure of crypto lender Celsius, hedge fund Three Arrows Capital, and, in a roundabout way, crypto exchange FTX. Billions of dollars are now locked up in various bankruptcy proceedings, and the industry is under the intense scrutiny of U.S. regulators and those elsewhere.
Cryptocurrency investing is not easy to understand. And of course, as in all investment ventures, there is a real risk of loss involved. Still, even with the noted meltdowns in crypto history, Prime Minister Sunak says he is full of confidence.
On June 11, he celebrated the launch of a London office by venture capital firm Andreesen Horowitz—one of whose funds has invested $7.6 billion into crypto—by saying, once again, that he is determined to “turn the UK into the world’s Web3 center.”
A Middle Position
Khalili’s article is detailed on the whys and hows that caused ripples in the crypto industry. And as in all new endeavors, crypto has proven to be a series of hard lessons that were learned by some investors. The lack of real regulations is partially to blame for U.S. crypto investors looking to find a more legally friendly government to work with. Because the United States’s regulations are considered too weak and the EU’s too tough, Sunak says England may be positioned just right to create a “Goldilocks Zone.”
Meanwhile, regulatory experts warn that, by tying future crypto regulation to a desire to drive economic growth and boost a financial sector that’s been flagged since Brexit, the British government could put consumers at risk.
“It’s not hard to imagine politicians and the crypto industry putting pressure on the [regulator] to relax rules to encourage growth and competitiveness,” says Mick McAteer, a former board member at the Financial Conduct Authority (FCA), the UK’s top finance regulator. “It’s a way for short-term political expediency to override long-term regulatory objectivity.” That, he says, could lead to a regulatory “race to the bottom” in which ordinary people’s money is at stake.
This article is a bit confusing if you are not familiar with cryptocurrency or with the British or the European Union’s way of passing legislation and just who that legislation affects. But Khalili added plenty of links to help give you a better understanding of how cryptocurrency may or may not be the business of tomorrow as Sunak thinks.
read more at wired.com