Crypto remains a priority for UK despite the political crisis

Crypto UK: Rishi Sunak has become the UK’s third prime minister in three months in a period of broader political and economic instability prevailing in the country, with many citizens struggling to pay their bills.

This is a challenging time for Britain and its citizens. Inflation, the energy crisis, and rising interest rates have led to the destabilization of the country.

However, Rishi Sunak claims he will fix the economy and bring stability. “I will place economic stability and confidence at the heart of the government agenda. This will mean difficult decisions to come,” he said after becoming the country’s new prime minister.

What is interesting about Sunak is its nickname, with many financial analysts calling him the “crypto-friendly” PM. Sunak is open to cryptocurrencies and other digital assets, and many believe he will actively shape more favourable market conditions in the UK for crypto investments.

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UK and economic crisis

According to a survey of 3,000 people by the government consultancy Money and Pensions Service, a quarter of UK residents currently have less than £100 in savings.

The cost of living in Britain has risen. Many citizens cannot cover their basic expenses, while most have loans that are also in default.

The constant changes of prime ministers, the death of Queen Elizabeth, and the general climate prevailing in the country’s politics have created economic instability. Brexit has also played a decisive role in this.

Buy-now-pay-later services are becoming increasingly popular in the UK. The well-known food delivery company Deliveroo now allows its customers to pay for a plate of food in three instalments after collaborating with Klarna, a primary short-term loan service. Such services are predicted to become even more popular at Christmas for buying gifts.

Crypto remains a priority

Despite economic and political instability, however, cryptocurrencies remain a priority for the UK.

In April, the UK government announced its plan to make the country “a global cryptoasset technology hub”. Rishi Sunak was the Finance Minister at the time.

According to the official government’s website, the plan is to apply “a package of measures to ensure the UK financial services sector remains at the cutting edge of technology, attracting investment and jobs and widening consumer choice”.

“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. 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,” said Sunak back in April.

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The strategy is based on testing

Over the past months, the UK has also proactively explored the potentially transformative benefits of Distributed Ledger Technology (DLT) in the country’s financial markets, which enables data to be synchronized and shared in a decentralized way to achieve greater efficiency, transparency and resilience.

According to the government’s plan, the next step is establishing a Cryptoasset Engagement Group. This group will examine ways to improve the UK tax system to encourage crypto investments and further the crypto-asset market’s development.

Back in October, right after the “crypto-friendly” PM became UK’s leader, the House of Commons, the lower house of the British Parliament, approved the recognition of crypto assets as regulated financial instruments.

The UK government will introduce a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate. The entire strategy will be pegged on stablecoins.

Stablecoins are a form of crypto assets typically pegged to a fiat currency such as the dollar and are intended to maintain a stable value. The government intends to legislate to bring stablecoins within the payment’s regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.

It will certainly take months for the whole project to proceed. A legislative procedure is being followed, which is particularly time-consuming. However, it is clear that the new Prime Minister gives a lot of importance to cryptocurrencies and wants to advance the plan to make the UK a ‘cryptoassets hub’ soon.

George Mavridis is a freelance journalist and writer based in Greece. His work primarily covers tech, innovation, social media, digital communication, and politics. He graduated from the Aristotle University of Thessaloniki with a BA in Journalism and Mass Communication. Also, he holds an MA in Media and Communication Studies from the Malmö University of Sweden and an MA in Digital Humanities from the Linnaeus University of Sweden.