Will Britain realize its dream of being a cryptocurrency hub?

Will London be able to compete with Washington, or will the latter remain dominant cryptocurrenciesIt greatly shapes the future of the global financial industry.

and the face Britain It has had a rough ride as part of its quest to become a global center for digital currencies, amid criticism from local entrepreneurs and US competition under President-elect Donald Trump, according to a report published by CNBC and reviewed by Sky News Arabia.

The report pointed to the UK Labor government’s commitment to making the country a ready environment for businesses working in the field of digital currencies and blockchain technology, as Tulip Siddique, the UK’s Secretary of State for Economic Affairs, said in a recent speech: “The government aims to engages… “Companies are preparing to make legal provisions for digital assets, including stablecoins — tokens linked to the value of sovereign currencies — as early as next year.”

It also said the government would not treat cryptocurrency lending services, which offer rewards to token holders, as crowdfunding schemes. Cryptocurrency industry leaders were concerned that such a classification would create burdensome regulatory requirements.

While Poppy Gustafson, the UK’s investment minister, told an event organized by the UK subsidiary of the Cryptocurrency Defense Group last week that “the sector has huge potential and is already playing a key role in the UK’s vibrant tech landscape”, the government is “committed to promoting and supporting … Blockchain is already taking decisive action steps to support it.

She pointed to the launch of the “Digital Token Fund”, a laboratory for testing new solutions based on distributed ledger technology for the issuance, trading and settlement of securities in a live regulated environment.

A report by the US network pointed out that “although Britain is pushing a number of regulatory proposals related to digital currencies, not everyone is convinced that it can become an important global venue for this technology.”

In this context, Stephen Bartlett, a British entrepreneur known for the podcast series “CEO Diaries,” said in a side discussion at the Defend Cryptocurrency event: “I don’t know if we have the policy makers or the government or the risk appetite or the attitude.” “Al -Moaiad Entrepreneurship to really take advantage of this opportunity”.

Data from the UK’s Financial Conduct Authority suggests demand for cryptocurrency products is growing in the country – the average value of cryptocurrencies held by Britons this year has risen to £1,842 ($2,337) from £1,595 a year ago, according to research released by the regulator last month.

The Financial Conduct Authority has also released a detailed roadmap for its implementation plan to regulate the digital currency industry. The watchdog will launch discussion papers on stablecoins, trading platforms, lending and investing over the next two years, with the full regulatory regime starting by 2026.

US Network quoted Tom Dove Gordon, vice president of international policy at Coinbase: “The UK must not allow the regulatory momentum around digital currencies to slow down, after Trump wins the election, there is a huge opportunity for the UK to be very successful in this area, but we need to… Regulatory clarity.”

The Republican politician ran on a clearly pro-crypto political platform, promising not to sell bitcoin seized by the federal government and to replace current SEC Chairman Gary Gensler, “who has taken an aggressive approach to enforcing various crypto companies during his leadership.”

Stephen Bartlett emphasizes that the UK has an incredible opportunity to act with real determination to innovate, and said: “If we do it the way the US naturally does, we won’t benefit from blockchain technology or artificial intelligence – we can play a really important role in “ensuring that the value of these technologies is returned to this country, but it must be radical”.

Between ambition and global competition

In an exclusive interview with the Ektisad Sky News Arabia website, Dr. Nidal Al-Shaar, economic expert and chief economist at ACI, confirmed that the United Kingdom is among the first countries to recognize digital currencies and allow their trading within comfortable limits. , indicating that disclosure plays an essential role in this area. He added: “In 2023, the UK government considered digital currencies as separate properties without giving them the status of currency, and in 2024 they issued the Digital Assets Act, which established this classification.

Although the UK government has announced its plan to make the country a global hub for digital currencies in 2022, development on digital trading rules has been limited in the past two years. Dr Al-Shaar said that trade in Britain remained limited to a number of local companies, while the United States and some Asian countries took the largest share of the market.

At the level of global competition, economic expert Al-Shaar pointed out that the idea of ​​turning Britain or European countries like France and Germany into a global center for digital currencies is contrary to the nature of these currencies, which is their freedom and ability to trade without geographical restrictions. He added: “Platforms can be anywhere, but digital trading depends on freedom and massive liquidity, which is the essence of digital currencies.”

As for the US scene, the chief economist at ACI pointed out that the administration of President Donald Trump, which is now taking a position that supports digital currencies and blockchains, can change the dynamics of the global market Tesla “To be an adviser to Trump in the areas of technology and government efficiency , he could boost the momentum of the United States to become a center for these technologies.

He emphasized that the United States is placing more importance on the blockchain industry as a major proponent of digital currencies, pointing to ongoing efforts to establish controls and rules for issuance and trading, including the Federal Reserve’s consideration of creating a digital currency for U.S. central banks.

Despite Britain’s position as one of the most important global financial markets, where huge trades such as gold take place, Al-Shaar believes that Britain will not compete with any other country, but will participate in the development of trading platforms and the launch of new currencies. using two main areas: trading within the Kingdom and via… Offshore licences.

The tagline concluded by pointing out that digital currency was actually born in the United States, which gives it a big advantage in leading the field, while Britain’s ambitions to achieve global leadership in this sector are still strained today.

UK measures spark exodus of cryptocurrency companies

For his part, an economic and financial expert, Ali Hamoudi, who specializes in British affairs, said in an interview with the website “Iqtisad Sky News Arabia”: “At this moment, I do not believe that the United Kingdom poses any threat to the United States or other cryptocurrency hubs such as the United Arab Emirates and Singapore In a global rush to embrace bitcoin, the United Kingdom is implementing measures that are inadvertently causing an exodus of cryptocurrency-related companies, while the United States is pushing ahead with institutional adoption. , allowing entities like BlackRock to support Bitcoin products Bitcoin, strict regulations in UK stifle their companies”.

Hamoudi added: “We’ve seen crypto companies increasingly move away from the UK, citing cumbersome and time-consuming regulatory processes as a key factor in the move away from the UK (FCA) has fallen by more than 50 percent in the last three years.”

Many companies have expressed concern that the UK is applying outdated regulatory frameworks to the fast-growing industry, stifling innovation and pushing companies to more crypto-friendly jurisdictions such as the US. Unsurprisingly, this trend threatens the UK’s ambitions to establish itself as a global center for digital assets, according to Hamoudi, who explained that it is too early to confirm who will be the first cryptocurrency center globally.

He noted that it is correct to believe that lighter regulation under Trump will be good for the price of Bitcoin and other cryptocurrencies. It may also include ideas that the government will be a major investor in Bitcoin, which would be both a blessing and a curse.

The British specialist believes that further institutionalization of an asset whose greatest virtue is its alleged lack of institutions would be problematic, while the presence of a major player reducing the float of easily traded bitcoin would likely increase volatility and make it more difficult to use as a medium of exchange for ordinary paper currency.