by David Drake
The UK has recently been making strides in the cryptocurrency market. Earlier in the year, the UK treasury committee launched an enquiry into cryptocurrencies to determine how they would impact businesses and investors. In another significant move, the UK government developed its Fintech Sector Strategy (FSS) that factors crypto-assets and launched it on March 22, 2018.
As part of its strategy, the government is establishing a crypto-asset task force in order to tap into the potential benefits of blockchain technology while protecting itself from potential risks.
According to Dr. Navjit Dhaliwal, the CEO at Iagon, the recent move by the UK government point to strategic position of the country as a global fintech leader. In his opinion, the country recognises that the underlying technology behind cryptocurrencies will revolutionise the financial sector in the world.
“With the United Kingdom’s decision to launch it’s FSS focusing on the establishment of a crypto-assets task force, the country is undoubtedly looking to place itself ahead of the curve when it comes to the underlying blockchain technology that is poised to revolutionize the way that we handle finances around the globe,” he says.
According to Tristan Chaudhry, CEO of Fry Egg, the indicates that the country is preparing to embrace blockchain technology and would reap the benefits in time.
“The UK has taken the first step in embracing crypto-assets and the myriad of benefits they bring to the global economy. Time will prove this was a wise choice,” he says.
Regulation is Key
To maximize the blockchain technology, the UK government has included regulation measures in the strategy by providing for establishment of industry standards and pilot schemes to ensure that fintech-financial institutions partnerships comply with existing regulations.
According to Benny Phang, the Chief Strategic Officer at Fanfare Global, regulation is an important aspect of strengthening the fintech industry. It will play an important role in safeguarding against risks and facilitate maturity of good crypto-asset projects for the benefit of all stakeholders.
He says, “A well-balanced regulatory structure will sieve out genuine blockchain projects from scammers, safeguard against risks and allow good projects to mature in a nurturing environment. All the stakeholders in the Blockchain ecosystem will also benefit from hard working entrepreneurs who hope to create beneficial blockchain-powered firms to enthusiastic users and investors who support these projects.”
The establishment of a crypto-asset taskforce by the UK government came a few days after global economic leaders concluded G20 summit. During the summit, leading global economies acknowledged that the technological innovation behind cryptocurrencies can enhance efficiency in financial systems and improve inclusivity in the global economy.
But, will other countries follow in UK’s footsteps? Dr. Dhaliwal thinks other countries will use a similar approach to strengthen their global financial sector position.
He says, “It would be my opinion that other countries will develop similar strategic planning methods in order to reinforce their overall position in the global financial sector. This will allow them to improve their country’s own economy as well as the evolving efficiency of their financial systems.”
On his part, Chaudhry feels countries will adopt some form of regulation since cryptocurrency and its underlying technology is the future.
“Cryptocurrencies and blockchain-based companies are the future, and I predict many other European countries will follow the lead of the UK and adopt some form of cryptocurrency legislation,” he says.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.