I’ll skip the lengthy background story, since you probably already know that Rishi Sunak’s appointment as the next UK Prime Minister has had more twists and turns than a season of Lost.
But now that the poisoned chalice is his, it’s worth noting that one of the UK political classes leading proponents of cryptocurrency and blockchain technology now has his moment at the top.
For how long is anyone’s guess, though his appointment brings some hope that Sunak can revisit his previously stated wishes “to make Britain a global hub for cryptoasset technology and investment”.
That could only be a good thing, right? Well, that all depends on who you ask.
Institutional cryptocurrency firms have long been exasperated with Britain’s glacial approach to crypto regulation. I have written in the past that “if the UK wants to be a competitor in the global crypto economy, it will need to start getting its regulatory house in order”.
That fact has only become clearer now that the European Union is set to harmonise crypto laws across all 27 member states with the introduction of the Markets in Crypto-asset Act (MiCA) in 2024.
That still rings true for the centralised exchanges that want to expand their global reach but have been hobbled by murky and restrictive regulatory standards.
But for the grassroots community that views cryptocurrency as a saviour from the shackles of governmental overreach, scepticism abounds.
“I would be very careful when a politician says they are ‘crypto-friendly,’” Alex Gladstein, chief strategy officer of the Human Rights Foundation, told Politico.
As a bitcoin maximalist, Gladstein warned: “This is usually code for wanting to control, censor, constrict and regulate use of bitcoin and cryptocurrency.”
One of the grassroots’ biggest concerns is that Sunak when Sunak discusses crypto, what he’s really talking about are Central Bank Digital Currencies (CBDCs).
Don’t just take the grassroots’ word for it.
“Unlike most of the digital money people use daily today, (CBDCs) would be issued by a central bank like the Bank of England in the UK,” explained Sunak last December, barely containing his excitement.
Sunak sees massive potential in CBDCs, which are about as far from the libertarian ideals that crypto was founded on. For all his gushing about making Britain a global crypto leader, perhaps he’s the biggest threat to crypto’s founding principles
What they tell you crypto regulation means:
•less scams
•less hacks
•clarity
What crypto regulation actually means:
•can’t trade on the best exchanges
•can’t receive certain airdrops
•tokens can’t pass value to holders
•can’t buy new tokens
•less privacy
— Luke Martin (@VentureCoinist) October 19, 2022
Clearly there exists a philosophical divide between the institutions and the grassroots.
It could all be a futile debate anyway: Sunak faces a daunting in-tray comprising a fractured party, spiralling inflation, global conflict, devalued pound and everything else in between.
Crypto regulation will probably be on the backburner for the time being.