As the 2021-2022 United Kingdom tax year finished on April 5, 2022, Her Majesty’s Treasury announced they were paving the way for the U.K. to become a global crypto asset technology hub. This could mean that the previously not particularly crypto-friendly U.K. is changing its strategy and trying its hand at making crypto investments more attractive. But what are the potential scenarios at play?
The Financial Conduct Authority (FCA), a financial regulatory body in the U.K., in its “Cryptoasset consumer research 2021” report, shows that approximately 2.3. million adult U.K. citizens held crypto in 2021, a 21% rise year-over-year. It seems natural that with rising interest and potential crypto mass adoption, HM Treasury would revisit its crypto regulations. This is especially true when considering that more and more private investment within the U.K. is located in crypto assets: Out of the 17.3 million adults who own some sort of investment product, 2.3 million are invested in crypto (according to the FCA’s “Financial Lives” survey).
What did HM Treasury say?
HM Treasury packed quite a lot into this announcement but, in brief, stated: 1) stablecoins are to be regulated and recognised as a form of payment; 2) legislation will be enacted for a financial market infrastructure sandbox to help businesses innovate; 3) the economic secretary will establish a crypto engagement group with key figures from regulatory authorities to advise the government; 4) there will be a review of U.K. crypto tax legislation to encourage further development of the crypto market (in…