UK Economic Secretary open to discussing digital asset firms’ access to banks

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In a recent session of the U.K. House of Commons, Chancellor of the Exchequer Jeremey Hunt indicated that the U.K’s new Economic Secretary Bim Afolami, who was appointed in November, would be “more than happy to meet” and discuss issues related to digital assets in the country.

Hunt was responding to a question from Member of Parliament Lisa Cameron, who asked whether the finance minister was willing to meet to discuss the alleged problems licensed digital asset firms have getting access to U.K. banks.

“Industry has fully supported the Prime Minister’s vision of the U.K. becoming a cryptocurrency hub, but many licensed companies are still finding it difficult to open bank accounts here, so will my right honourable friend meet with the all-party parliamentary group for digital assets and discuss what progress can be made on digital Britain?” asked Cameron.

The Crypto and Digital Assets All Party Parliamentary Group (APPG) that Cameron refers to—and chairs—is a forum for parliamentarians, regulators, Government, and industry to “discuss the challenges and opportunities relating to the crypto sector and to explore the need for future regulation of the sector.” It essentially functions as a digital asset advocacy group.

In his response, Hunt emphasised the U.K.’s commitment to a responsible embrace of innovation, pointing to both the progress the country had made in regulating stablecoins and the new financial promotions regime as evidence.

“The U.K., and London in particular, has become the global crypto hub, but to make sure that the market really can take off in the way that was intended — in a responsible way — we need to regulate it, which is why we’ve introduced regulations for stablecoins, for promotion of crypto services,” said Hunt.

He then gestured to Economic Secretary Afolami and said he would be available to speak with the Crypto and Digital Assets All-Party Parliamentary Group on the issue of banking.

As economic secretary, Afolami is now in charge of many of the policies related to digital assets in the U.K. In terms of his digital currency-leanings, the only indication of where Afolami stands in the sector came in 2022 when he engaged with Coinbase (NASDAQ: COIN) executives to discuss the financial services landscape, emphasizing the importance of an appropriate regulatory regime, as stated on his website.

Advocacy group CryptoUK, which is also involved in the APPG, welcomed Afolami’s appointment, saying on X (formerly Twitter), “We look forward to working with new EST @BimAfolami to help realise the government’s ambition to make the UK a global cryptoasset technology hub.”

We look forward to working with new EST @BimAfolami to help realise the government's ambition to make the UK a global #cryptoasset #technology hub. We will brief Bim on our sector's contributions to the UK economy & ongoing challenges, including #financialpromotions & #debanking. pic.twitter.com/GyEWBgawZd

— CryptoUK (@CryptoUKAssoc) November 14, 2023

The U.K. government has been fairly consistent in its talk of creating a ‘crypto hub,’ a desire coined by Prime Minister Rishi Sunak in Spring 2022 (when he was Chancellor of the Exchequer). However, perhaps influenced by scandals and collapses in the digital currency space since then, the most high-profile being the FTX fiasco, the U.K. has begun to take a more measured and cautious approach to the sector—one more in line with Hunt’s comments about creating a digital currency hub in a “responsible” way.

On June 29, the passage of the U.K. government’s Financial Services and Markets Act 2023 (FSMA) marked a significant turning point in this process. Its goal is the full integration of digital currencies into the U.K.’s well-regarded financial services regulations, and the FSMA gave the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)—the country’s top financial sector regulator and the banking watchdog, respectively—the necessary powers to accomplish this.

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