What Rishi Sunak as UK Prime Minister could mean for crypto

Rishi Sunak has become Britain’s third prime minister in three months, pledging to tackle an economic crisis that has left millions struggling to pay their bills.

In his role as Chancellor of the Exchequer, Sunak led the UK economy through the COVID-19 pandemic. At the age of 42, the country’s youngest leader in more than 200 years claims that he wants to fix the economy again.

“I will put economic stability and confidence at the heart of the government’s agenda,” he said outside 10 Downing Street on Tuesday.

Sunak is often depicted as a “crypto-friendly” leader open to cryptocurrencies and other digital assets. So what could a Sunak premiership mean for the development of the UK’s crypto industry?

What are Rishi Sunak’s plans for UK crypto?

In April, the UK government announced its plan to make the country “a global technology hub for crypto-assets”.

Led by Sunak, Chancellor of the Exchequer at the time, the plan aims, in brief, to “ensure that the UK financial sector remains at the forefront of technology, attracts investment and jobs and expands consumer choice,” according to the government’s statement. website.

Speaking on the initiative back in April, Sunak said: “The measures we have outlined today will help ensure that firms can invest, innovate and scale up in this country.

“We want to see tomorrow’s businesses – 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.”

In the initial phase, the government recommends that the strategy will be based on testing. It plans to introduce a “financial market infrastructure sandbox” to enable companies to experiment and innovate in crypto-asset technology.

The next step will be to establish a Cryptoasset Engagement Group, which will work closely with the industry and explore ways to improve the competitiveness of the UK tax system to encourage further development of the cryptoasset market.

The whole strategy will be linked to stablecoins – a form of crypto that is linked to a fiat currency like the dollar, and therefore meant to maintain a stable value.

Steps have been taken to regulate stablecoins so that the new technologies are ready to be used “reliably and safely”.

The Financial Services and Markets Act would give local governments the freedom to regulate cryptocurrencies. The bill is currently under consideration.

Sunak’s ‘Britcoin’ Plans

The general consensus on the back of 2020 is that Rishi Sunak thrived during the pandemic, responsible for many of the public-centric policies that helped people through economic hardship as a direct result of COVID-19.

He left that year as one of the most popular politicians on the rise in the country.

But in the summer of 2021, he proposed a central bank digital currency (CBDC), or “Britcoin” to come into play across the UK economy by 2025.

In Deloitte’s words, a CBDC is “an electronic form of central bank money with potential broad use by households and businesses to store value and make payments”.

The reception was mixed. For some, Britcoin will help streamline the digital transaction process, as money can be moved quickly and easily between accounts and cut banking costs.

For others, however, there are concerns about how a CBDC could affect regulatory practices such as interest rates and how much money banks have available to lend.

There are also major privacy concerns when it comes to the state having such a close relationship with individual bank accounts. Not only would they have full access to the details of transactions, but they could also theoretically have the power to simply cut a supply of money.

Sunak has previously stated his support for CBDC and its benefits, so it will be interesting to see if the concept resurfaces in his role as prime minister.