The UK government has announced vague plans ‘to make Britain a global hub for cryptoasset technology and investment’, which includes having the Royal Mint issue an NFT.
In a statement bursting at the seams with fintech buzzwords, the government announced stablecoins will be recognised as a valid form of payment, that it will legislate for a ‘financial market infrastructure sandbox’ to help firms innovate, it will launch an FCA-led ‘CryptoSprint’, and will work with the royal mint to introduce an NFT.
Why? Apparently it’s all part of a package to ensure the UK financial services sector, which makes up a big part of the UK economy, remains ‘at the cutting edge of technology’ and attracts investment and jobs.
The announcement goes into the most detail when it talks about legislation to bring stablecoins within the payments regulatory perimeter – which seems to mean its OK to use them. It defines stablecoins as ‘a form of cryptoasset that are typically pegged to a fiat currency such as the dollar and are intended to maintain a stable value.’ The government claims this will could provide a more efficient means of payment and widen consumer choice – though we’d be astonished if as much as 1% of the electorate has heard of them.
It’s also pledged to ‘explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets.’ This is what is more commonly referred to as blockchain, and it says it will do this by creating a sandbox to enable firms to ‘experiment and innovate’, and will look at how the technology could be used for sovereign debt instruments.
“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” said Chancellor of the Exchequer Rishi Sunak. “We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term. This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
There are many more things mentioned but with little detail given, such as the fact the government is looking into how DeFi (decentralized finance) can be are taxed, it’s going to do a two day ‘CryptoSprint’ in May, and that it’s going to create a Cryptoasset Engagement Group.
All this stuff is described as if it’s just like upgrading the office with the latest equipment in order to make the company better, which may be how some politicians think about these things, but there’s an obvious contradiction with the state getting involved in crypto in the way it says it wants to.
A primary point of blockchain and crypto finance is that is doesn’t rely on government or a centralised bank to function, and indeed the entire thrust of the culture is to move away from states underpinning or even being involved transactions between individuals. So it’s all a bit messy straight off the bat, like attaching wings to a train.
How much the current government genuinely wants to fuse the UK economy with blockchain and NFTs remains to be seen, and with wider consultation promised, perhaps we’ll get some more idea from them later down the line on how exactly this would work beyond today’s bombardment of buzzwords. Alternatively this could turn out to be a shallow wave of the hand by a government department looking to be perceived as hip with the latest trends, for behind the scenes political reasons unknown to us mere mortals.
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