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UK is falling behind in digital currency race, former Chancellor says

The former Chancellor of the United Kingdom, Philip Hammond, said the country has allowed itself to fall behind some of its neighbors in the race to become a world-leading destination for the digital currency industry.

Hammond said that Switzerland is further ahead and the European Union is moving faster. He called for an accelerated approach to establishing an effective regulatory regime. “There has to be an appetite to take some measured risk,” he said.

Hammond’s comments echo those heard in the House of Lords recently. After a second reading of the proposed Financial Services and Markets Bill, at least one peer said that a whole new regulatory framework would be needed to govern the industry.

The former Chancellor will head up a new digital asset custodian, Copper. It recently withdrew its application to register with the Financial Conduct Authority (FCA) in 2022, opting to move to Switzerland instead.

The race is on—perhaps the UK should quicken its pace

Despite what Hammond says, the U.K. is still leading when it comes to forward-thinking regulations for the industry. While it may be true that Switzerland is beating it, and the EU is moving faster (not something it is known for), the U.K. isn’t to be counted out.

For example, not long ago, the Law Commission proposed forming a new category of personal property to protect holders of digital currencies and other tokens. The FCA has some oversight into what digital currency companies do in the country, and the Financial Services and Markets Bill will give it new powers.

While a faster pace wouldn’t hurt, it’s important to remember that ex-Chancellor Hammond is now taking a paycheck from a custodian in an industry with its own agenda. It’s best to take the time to craft the right regulations to foster innovation and stamp out fraud rather than be rushed into penning laws that suit custodians like the one he now works for.

Will PM Rishi Sunak’s dream come true?

Another former Chancellor, now Prime Minister, outlined his vision to turn the U.K. into a world-leading hub for what he calls “crypto-assets.”

While there seemed to be an initial flurry of activity after Rishi Sunak’s comments and some truly innovative and sensible thinking has come out of the U.K. in recent years, it’s undeniable that the momentum seems to have died down slightly, and in this sense, Hammond is correct.

With the 2022 industry wipeout and the catalog of carnage it laid bare, it’s more important than ever for countries with a grasp of the bigger picture to move quickly to regulate the industry in ways that protect users while fostering innovation. Rogue players like FTX and Digital Currency Group must be held accountable, and those building applications to utilize this world-changing technology must be encouraged.

If the U.K. gets this right, it can become one of the hubs for the era of great utility and revolutionary change that will come, thanks to scalable blockchains like Bitcoin SV. With the promised policy document due in “weeks, not months,” according to financial services minster Andrew Giffith, we’ll soon have some insight into which way the U.K. will go.

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