U.K. 'Risks Falling Behind' on Digital Assets
Market Musings

U.K. 'Risks Falling Behind' on Digital Assets

By Connor Sephton
2d ago
2m

A day after joining a crypto custody firm, former chancellor Philip Hammond says British policymakers should stop talking about digital assets and start acting.

U.K. 'Risks Falling Behind' on Digital Assets

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The U.K. is in danger of falling behind unless regulators help companies embrace digital assets, former chancellor Philip Hammond has warned. 

Speaking to The Block after it was announced that he had joined the British crypto custody firm Copper as a senior advisor, Lord Hammond urged policymakers to stop talking about digital assets — and to take action by developing a legal framework instead. 

Pointing out that the U.S., Canada, Switzerland, Germany and Singapore are already taking steps that will allow digital assets to be used safely in their economies, Lord Hammond warned: 

“The U.K. is stuck talking about it, while others are doing it. This is a huge risk to the future success of the nation’s financial services sector. As Britain grapples with the question of how to maintain its position as a global financial services position, post-Brexit, we must seize the opportunity that the digital revolution presents.” 

The issue of Brexit is a significant one to say the least. Some have feared that the country’s departure from the European Union would undermine the City of London’s status as a financial hub, with some companies opting to move their operations to other countries.

Lord Hammond — who stated he was “interested in Bitcoin” while he was chancellor — says being an early mover would cement Britain’s reputation as an attractive place to launch a fintech firm. 

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A Big Task Ahead 

With some blockchain entrepreneurs openly stating that London has lost its allure in recent years, Lord Hammond’s task will be to “promote the U.K. as a global leader in digital asset technology.” 

Although he has contacts in high places — not least because the Conservatives remain in power — lobbying rules mean he is limited when it comes to capitalizing on these government connections.

Former prime minister David Cameron landed himself in hot water over the summer when it emerged that he had lobbied the government on behalf of Greensill Capital, a finance company that later collapsed.

Lord Hammond says lessons have been learned from this scandal.

He also believes there are considerable inefficiencies with the payments systems that are used at present — and the instant settlements that blockchain technology can provide, along with the prospect of disintermediating lenders, could have compelling advantages.