How crypto could help Rishi Sunak save the UK economy
Like his predecessors, the new Prime Minister of Great Britain, Rishi Sunak, has promised to focus on the economy. The new ruler may twist his economic strategy by finally embracing crypto and digital assets.
Rishi Sunak inherited a government in a precarious state on the economic, political and social fronts, with high inflation and high energy costs wreaking havoc across the country. His predecessor, Elizabeth “Liz” Truss, left the post after facing backlash for her economic policies.
In Truss’ forty-day term, the British pound crashed to a forty-year low against the US dollar. This collapse made way for the shortest-serving British prime minister to hand over power to Sunak, the youngest head of state in 200 years.
Rishi Sunak, In Crypto We Trust
Rishi Sunak is no stranger to crisis. The new British Prime Minister has hinted at his intention to turn the country into a crypto hub by giving companies support to set up shop in the country. The government official has served as finance minister through the COVID-19 pandemic.
He later worked as Chancellor of the Exchequer, leading the initiative to improve the UK’s financial services sector with “cutting edge” technology. In April 2022, Sunak said:
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.
Recently, Rishi Sunak and members of his government have been talking about the “opportunities” in the crypto industry. In the US and the EU, the initiatives to regulate and support crypto companies are in an early phase.
If the UK can fulfill its vision, the country could see an influx of new companies banking on its economic success. From Fintech to startups, a new wave of capital can curb inflation and its consequences.
Is Britain Laying the Groundwork to Embrace Crypto?
One thing is for sure, Rishi Sunak must play an innovative and aggressive strategy to revitalize the UK economy. Embracing crypto, digital assets and blockchain technology could be the right step in that direction.
The UK needs the legal framework to bring the nascent asset class into its economic model. In the past, government officials, including Bank of England Governor Andrew Bailey and Deputy Governor Jon Cunliffe, have warned people against investing in Bitcoin, Ethereum and crypto.
Cunliffe and other senior government officials classified crypto as a “speculative” and worthless asset class. In 2021, Bailey expressed The Bank of England’s stance on cryptocurrencies with the following statement:
They have no intrinsic value. That’s not to say that people don’t value them, because they can have extrinsic value. But they have no intrinsic value. I’m going to say this very bluntly again, only buy them if you are prepared to lose all your money.
However, the UK could be working to reverse its long hold on the digital asset class. Since Rishi Sunak took office, the country has passed several pro-digital asset bills, including a bill to recognize crypto as a financial instrument and a bill to regulate stablecoins.
Crypto alone may be insufficient to reverse Britain’s current economic dilemma, but it points to something the country has longed for for years: innovation, change and industry. These elements once made Britain the largest economy in the world.
