Crypto Brexit is underway.
While the European Union is growing increasingly crypto-wary (crypto-hostile won’t be an exaggeration neither), the United Kingdom seems to have spotted an opportunity to stand out.
After being crypto sceptic for many years, mostly in accordance with the European stance, the UK government announced in the beginning of April its plans to make the country “a global cryptoasset technology hub”. It appears that so far British officials are keeping that course, however hard that might be for them.
⚖️ In July 2021 Her Majesty’s Treasury published a proposal of strict reporting requirements for crypto transactions, which would include those to non-custodian wallets, much like the MiCA law voted this spring by the EU Parliament. However, after realizing how crippling this would be for the crypto industry (and probably after watching a number of successful crypto companies leaving the EU for better jurisdictions after the vote), the agency has changed the tone.
This week HM Treasury confirmed that “instead of requiring the collection of beneficiary and originator information for all unhosted wallet transfers, cryptoasset businesses will only be expected to collect this information for transactions identified as posing an elevated risk of illicit finance.” This conclusion not only spares the non-custodian wallets, it also preaches the rational approach to crypto KYC, unlike the EU’s, which pushes for a heavy reporting on every (!) crypto transaction, even as small as €1 ?
The news coincides with Tether’s announcement of a GBP-pegged stablecoin to come in July (citing its CEO ““We believe that the United Kingdom is the next frontier for blockchain innovation”).
?️ What’s more, earlier this year the Economics Affairs Committee of the House of Lords concluded that there is no “convincing case” for the UK to issue a CBDC – the statement that we applaud as clear-headed in times when Central Banks seem so excited by the prospect of tightening their grip on citizens’ finances.
The EU and the UK are moving in the opposite directions on the crypto question now, and while Christine Lagarde suggested a second MiCa to bring more regulations into the space, the UK is busy with bringing crypto business to the country ?
Should we bet on which approach will prove to be rewarding in the long run? ?