Regulation
UK snap election upends cryptocurrency legislation and raises questions: what will Labor do? – DL News
- The upcoming UK general election will delay cryptocurrency regulation, industry insiders fear.
- Prime Minister Rishi Sunak had pledged to make the nation a crypto hub.
- Labour’s position on cryptocurrencies is unclear.
Just when the UK was ready to adopt new cryptocurrency legislation, a surprise arrives: early elections.
Now that Conservative Prime Minister Rishi Sunak has called a general election for July 4, cryptocurrency leaders have resigned themselves to an unexpected delay in laws designed to fuel blockchain technology startups in Britain.
This was stated by Ian Taylor, advisor to the board of directors of the CryptoUK trade body DL News the development will likely delay long-sought legislation for crypto companies by at least six months.
Even worse, the delay comes because competitors – the European Union, Dubai, Hong Kong and even the United States – are accelerating the introduction of rules and regulations for a growing industry that is becoming mainstream.
“It’s a net negative, actually, because we’re laggards,” Taylor said. “We are behind the rest of Europe, firstly, and then other jurisdictions in Asia and the Middle East.”
Crypto Center
To be sure, the long-term growth of the cryptocurrency sector in a nation fueled by a global financial center, ample investment capital and a durable business class should not be hindered by an election cycle.
“Both sides are committed to making the UK a hub for digital financial services,” said Isabella Chase, senior policy advisor at cryptocurrency firm TRM Labs. DL News.
However, in the short term, existing legislation for crypto companies being developed by lawmakers may stall.
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Zooming out, the regulatory narrative in the industry has been turned on its head in the last month.
In the United States, which cryptocurrency leaders have long decried as a fractious mess, there is suddenly a dose of clarity as Congress acts to sweep away cryptocurrency legislation. Additionally, cryptocurrencies have become a hot issue in the 2024 presidential contest.
Donald Trump, the presumptive nominee of the Republican Party, has discovered his Bitcoin’s inner brother. And President Joe Biden, the Democrat running for a second term, is facing some thorny political questions as Congress gets busy with cryptocurrencies.
Meanwhile, across the Channel, the European Union is pushing ahead with a series of regulatory changes related to cryptocurrencies and blockchain, including: Notthe reference regulatory regime.
In Great Britain the political situation is confused.
Sunak promised making the UK a global hub for cryptocurrency technology in 2022. But the Labor Party, which leads the Conservatives by 21 percentage points in polls, has yet to set out a detailed crypto policy.
Entrepreneurs and investors in the UK crypto landscape must now adapt to the strong likelihood that a new government with little affinity for their sector will take office in six weeks.
“We are still waiting to see Labour’s full plans for the sector.”
—George McDonagh, KR1
“We are still waiting to see Labour’s full plans for the sector,” said George McDonagh, co-founder of digital asset investor KR1. DL News.
However, there are some clues.
In January, Rachel Reeves, who is expected to become Chancellor of the Exchequer if Labor wins on July 4, said there was a need embrace innovationincluding tokenization of securities and a central bank digital currency.
“But nothing about cryptocurrencies,” Taylor said.
On Wednesday, any hope that Sunak would deliver a shock result and maintain continuity in crypto policy appeared to fade.
Making his election announcement in pouring rain outside 10 Downing Street, Sunak was drowned out by a protester blaring a Labor Party anthem from nearby speakers.
Hardly a desirable outlook for a prime minister who has been trailing the opposition in the polls for months.
Industry ally
Sunak’s government has positioned itself as an ally of industry. His ministers urged regulators not to do so undermine Crypto companies stifling innovation and to apply too strict rules.
Industry observers had done so too expected to see the government’s implementation of final regulations for the sector – including rules for issuing, trading, investing, custody and lending of cryptocurrencies – come to fruition in 2024 alongside new rules for stablecoins .
The agenda now had to take breaks.
“This will dissuade companies from coming to the UK, to the extent that founders and start-up companies want clarity,” Taylor said.
“They like to know what they are doing and be able to plan for the future,” he continued. “If it takes longer than, say, moving to another jurisdiction that already has legislation in place, then I see that as a problem.”
Inbar Preiss is a regulatory correspondent at DL News. Eric Johansson is DL News’ News editor. Do you have advice? Send them via email to inbar@dlnews.com AND eric@dlnews.com.