UK to be hub for crypto but minister warns of criminals

This follows a pledge from the Chancellor for The Royal Mint to issue NFTs

Graphic representation of a city connected by blockchain technology, showing London's Shard connected to other buildings by digital lines of communication                                 
It is hoped making the UK a crypto hub will inspire financial innovation – Photo: Getty Images
                                

Chris Philp, a Conservative Party politician serving as Parliamentary Under-Secretary of State for Tech and the Digital Economy, has reiterated the Treasury’s plan to make the UK a global crypto hub.

But he also warned of the potential for criminals to use digital assets.

Philp told Bloomberg Radio: “We do intend the United Kingdom and London to be crypto centres. But of course, we’ve got to do that in a way that protects the public and pays attention to issues concerning, for example, money laundering and making sure that crypto is not used to circumvent things like sanctions.”

NFTs and stablecoins

The UK government in April outlined plans to push into the crypto sector by issuing non-fungible tokens (NFTs) and recognising stablecoins as a valid form of payment.

The Chancellor of the Exchequer Rishi Sunak also stated The Royal Mint would make an NFT and set up a “financial market infrastructure sandbox” to ensure that financial institutions can experiment and innovate in UK markets. The new guidelines also outline the formation of a “cryptoasset engagement group” that will allow ways of exploring competitiveness of the UK tax system to encourage further development of the crypto sector.

“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined will help to ensure firms can invest, innovate and scale up in this country,” Sunak said.

“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation,” he added.

The collapse of LUNA

In May, the collapse and depegging of the stablecoin TerraUSD (UST) and the large fall in value of its sister coin Terra (LUNA), coupled with the current crypto bear market, has prompted Philp to look for a balance.      

The minister said: “The Treasury are working closely with the Bank of England (BoE), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority to make sure that balance is struck in the right way.”

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