Andrew Griffith, economic secretary to the UK Treasury and Member of Parliament, has revealed that the UK government plans to regulate the cryptocurrency industry by implementing rules within the next year with a view to making the country a digital asset hub. The legislation aims to encourage growth in the sector:
Regulation is on its Way
According to an interview on CNBC, Griffith stated that the UK government is prepared to enforce rules on the crypto sector, with discussions scheduled until the end of April. He suggests that such regulation should take place within the next year, now that the UK has regained control of its monetary system post-Brexit;
“We’ve got control back of our rulebook, not something the UK has had for decades. So we’ve got the ability to move in an agile and proportionate way. And I’m definitely keen we make the most of that opportunity.”
Griffith claims that the legislation will encourage the development of the asset class and will aim to position the Kingdom as a global cryptocurrency center:
“Wherever possible, we want to see the same asset, the same transaction regulated in the same way. But there are some additional opportunities in the crypto asset or distributed ledger space, and we want to take advantage of that.”
Previous comments by the UK’s finance minister, Rishi Sunak, have indicated support for the cryptocurrency industry, and in particular its potential to create a “global hub for crypto asset technology.”
Sunak has even asked the Royal Mint to create a non-fungible token (NFT), though the UK government ultimately withdrew the proposal.
The Hostile Stance of the Central Bank
Although the UK’s politicians appear to be in favor of the cryptocurrency sector, this view is not shared by the Bank of England. The central bank’s Governor, Andrew Bailey, has been one of Bitcoin and other cryptocurrencies’ most vocal critics, describing them as having no intrinsic value:
“I’m going to say this very bluntly again. Buy them only if you’re prepared to lose all your money.”
Bailey has even expressed concern about El Salvador’s decision to make Bitcoin legal tender within its borders, warning that citizens may be unaware of the risks involved:
“It concerns me that a country would choose it as its national currency. What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have.”
The President of El Salvador, Nayib Bukele, responded sceptically to the central bank’s concerns:
“Bank of England is “worried about El Salvador’s adoption of Bitcoin? Really? I guess Bank of England’s interest in the well-being of our people is genuine. Right? I mean, they have always cared about our people. Always. Gotta love Bank of England.”
