Johnson’s resignation could delay crypto legislation

A possible resignation of Boris Johnson as leader of the Tory party and prime minister of the United Kingdom could lead to a reshuffle of the cabinet and the need to fill key positions in government and other departments such as the Treasury, which could affect adoption. of new rules and legislation.

On Thursday, July 7, the prime minister’s office confirmed that Boris Johnson will address the nation to most likely announce his resignation as party leader, but that he plans to remain prime minister until a successor is elected in the fall, according to several media outlets. However, many politicians in the country have questioned whether Boris Johnson could become interim prime minister during this time – or what his role as interim prime minister would be.

The number of dismissals in high-ranking positions in public office before Boris Johnson’s decision to resign, which some sources estimate is around 40, may have an impact on the adoption of new rules and proposed legislation. This is the case for the government’s plans to adopt cryptocurrency regulation, in particular stablecoin regulation, and a proposal to adopt new rules to regulate the Buy Now, Pay Later (BNPL) sector.

The department leading this regulatory effort is the UK Treasury, which recently lost its boss Rishi Sunak – replaced by Nadhim Zahawi – and its financial secretary John Glen, who has not yet been replaced. These are important losses for the department, and as Bank of England Deputy Director Jon Cunliffe explained at an event on Wednesday, the Treasury’s plans to establish a regulatory system for stack coins may have been delayed by “recent events” that may refer to these layoffs. These comments were made before the Prime Minister announced his plans to speak to the nation.

Mr. Cunliffe suggested that the Treasury could introduce stablecoin regulation as early as August, but with a new CFO and an interim prime minister, the priorities and timing of these regulations could change.

Read more: UK Treasury introduces Stablecoin regulation within weeks

A similar situation applies to potential measures in the BNPL sector. The Ministry of Finance concluded a public hearing in January, and submitted a consultation response on 20 June. The government plans to publish a consultation on the draft law at the end of the year. This will be followed by a new consultation to be launched by the Financial Conduct Authority (FCA) around mid-2023, where the regulator will also seek to propose new rules for this sector. But for the FCA to launch its own publication, the Ministry of Finance must first prepare secondary legislation.

These plans may now change as one of the biggest proponents of BNPL regulation in the Treasury was John Glen, who recently resigned. According to some media, the difficulties of filling some of the vacant positions in the Treasury and in other ministerial positions may threaten a certain paralysis of the institutions until a new prime minister takes office.

Read more: UK BNPL Regulation Unlikely before mid-2023

There is still an opportunity to minimize these disruptions, as one of the candidates to replace Boris Johnson as prime minister is former Chancellor Rishi Sunak, who is likely to continue his work in the Treasury.

General choices

Some commentators have also speculated about the possibility that Boris Johnson will call for an early parliamentary election with the intention of receiving a new mandate from the British people to continue. Regardless of the outcome of a new parliamentary election, if Boris Johnson were to decide to call a new election, the queen would be forced to dissolve parliament.

This will make it impossible to adopt new legislation before a new parliament is formed, which will take a few months and, depending on the outcome of the election, could propose a new legislative agenda for the new parliamentary session.