Key takeaways:
- The government of Rishi Sunak is moving ahead with plans to make the UK a hub for crypto assets on a worldwide scale.
- Several actions designed to support the greater use of cryptocurrencies and other digital assets are included in the proposed reforms.
In an attempt to stimulate economic progress after Brexit, Chancellor of the Exchequer Jeremy Hunt unveiled a bundle of 30 reform measures for the UK’s financial institutions. A digital pound, blockchain testing, and encouraging investment in cryptocurrency businesses all made the cut.
The current UK regime emphasised that it would develop a more intelligent regulatory structure for the nation that would be flexible, less expensive, and more attentive to emerging trends.
The official statement touches on several issues, such as advising on ideas for the creation of a central bank digital currency (CBDC), trying to extend a cryptocurrency tax break for investment managers, bringing stablecoins under regulatory oversight, and developing a sandbox that would allow businesses and policymakers to test out emerging innovations that could revolutionise the capital sector.
As part of the declared actions, a formal report to the consultation on extending the Investment Manager Exemption to encompass crypto assets will be published. This will make it easier to have these assets in the portfolios of foreign funds handled in the United Kingdom without facing the possibility of UK taxation.
Before the end of the year, the current regime of Rishi Sunak intends to put this transformation into effect through HM Revenue & Customs regulations, according to Chancellor of the Exchequer Jeremy Hunt.
Aside from crypto taxes, the Financial Services and Markets Bill aims to strengthen regulatory control over the sector. The legislation will increase the Financial Conduct Authority’s (FCA) control over domestic crypto operations and advertising. Additionally, a prohibition that would prevent the UK from selling international cryptocurrency is anticipated to go into effect.
The model also provides consumer protection from new technologies. To promote innovation and reduce costs, the government is attempting to reform the Consumer Credit Act of 1974.
It’s interesting to see how UK financial institutions are stepping up to take a leading position in the cryptocurrency space. It’s important to remember that it was not very long ago when a group of UK MPs launched an inquiry into crypto assets and sought written submissions.
