When Truss wins the election for Prime Minister, the UK’s crypto future is at risk

With Liz Truss winning the race to become the country’s new prime minister, Britain’s future as a crypto hub remains uncertain, with business owners and investors wondering what rules will be in place for the digital asset sector under the new leadership.

Truss, who won the race to lead the Conservative Party on Monday, defeating former Exchequer chancellor Rishi Sunak, has so far been tight-lipped about her plans for a virtual currency. Several requests for comment on its digital assets rules went unanswered by its team.

By contrast, Sunak established himself as a proponent of cryptocurrency when he served as chancellor, announcing plans in April to revive the UK’s position as a pioneer in financial technology. This includes calls for crypto infrastructure to be adopted, stablecoins to be regulated on the same terms as non-banks, and the UK’s Royal Mint to develop its own imperishable token.

After Sunak left the cabinet in July, his desire to enact some of these proposals has waned. Other crypto proposals may be shelved indefinitely as Truce inherits a troubling internal environment that includes the UK’s cost-of-living crisis and potential recession.

According to Jackson Mueller, director of policy and government relations at Crypto, “diversity on crypto policy is critical. Beyond a few public statements, it’s unclear how Ms Truss will approach cryptoasset policy or what specific challenges she plans to focus on.

A new beginning

Businesses that have spent months liaising with Sunak and his colleagues at the Treasury will now have to start because of Truce’s victory. Who Truss chooses as the new chancellor, perhaps the biggest influence on crypto will be the Treasury’s strategic priority area.

A 2018 tweet in which she said digital assets should be embraced “in a way that doesn’t limit their potential” alone has made Truss an anonymous figure in the industry.

Bradley Duke, co-CEO and founder of cryptocurrency exchange trading product provider ETC Group, said: “Given that the Treasury, the Bank of England and the FCA all have their own crypto agendas, it would be great to receive some clarity. In the direction of travel” he meant “a clear and coherent policy framework on crypto, followed by enforcement”.

UK as a center of financial innovation

In recent years, there have been fears that Britain is losing its position as a world leader in financial innovation after several cryptocurrency companies left the UK for failing to comply with the Financial Conduct Authority’s strict anti-money laundering rules.

“While Rishi Sunak envisions the UK as a global hub for crypto, it has fallen behind other hubs such as Frankfurt and Zurich,” said Gilbert Hill, chief strategy officer of UK-based Pool Data. Hill cited issues including the lack of transparency of Statcoins’ role as payment methods. “Now there is a new opportunity to take the initiative.”

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