A new report said the UK Government should assist the City of London in offering “crypto-assets” for cryptocurrencies such as bitcoin and ethereum. The study suggested the UK government and regulators should leverage Brexit and capitalise on the opportunities arising from the rapid growth of crypto-assets. The analysts urged the City of London financial centre to become a world leader in Distributed Ledger Technology (DLT) as it is currently viewed as a high-growth, high-potential sector.
However, analysts fear the UK Treasury could “inadvertently squash good ideas” regarding bitcoin and other cryptocurrencies before they can thrive.
The study found Brexit poses a “valuable opportunity” for UK policymakers to get ahead of global rivals, including the EU, in regulating crypto-assets.
Referring to the growth of cryptocurrency sector, financial industry lobby group TheCityUK said the UK government should use its “new trade policy as a vehicle” to position itself at the forefront of finance’s “next generation of technological developments”.
Miles Celic, Chief Executive Officer at TheCityUK, said: “There is a fierce global race underway to see which applications of DLT and crypto assets will win out.
“Its regulatory FinTech sandboxes, for example, have been copied around the world.
“Now we need to show similar vision and nimbleness in our regulatory approach to crypto assets.”
A report called “Cryptoassets: Shaping UK regulation for innovation and global leadership” urged UK policymakers to urges capitalise on the UK’s newly acquired regulatory freedom and steal the lead from its global competitors when it comes to the cryptocurrency sector.
However, the report said the UK “must act quickly if it is to set a global gold standard in crypto-assets and DLT regulation”.
The report added: “Many other jurisdictions have recognised the opportunities presented by crypto-assets and related technologies.
“These other jurisdictions are moving to set their own agendas.
“The UK should be considered in its response, it must act as quickly as possible if it is to remain at the forefront of innovation while also providing certainty and addressing any new, unregulated risks.
“The UK should show ambition and have the confidence to set out its own internationally compatible gold standard.”