Sunak must tackle urgent priorities but should stay keen on crypto
First, the UK government must fix its self-imposed crisis. Then it can assert its leadership in the digital future of finance
Rishi Sunak took up the mantle of UK prime minister just over a week ago, following a month of Gilt market turmoil instigated by his predecessor Liz Truss and her chancellor Kwasi Kwarteng.
He is the youngest person to lead the government since the Earl of Liverpool 210 years ago, and like many his age and younger, Sunak has an interest in crypto.
Earlier this year, whern hewas chancellor himself, Sunak outlined plans to transform the UK into a “global hub for crypto asset technology” and bring the UK to the forefront of the emerging digital capital markets.
The Treasury said that it would make stablecoins respectable though regulation, re-examine the tax treatment of crypto assets, establish sandboxes to foster innovation, explore issuing Gilts using distributed ledger technology and issue non-fungible tokens through the Royal Mint.
Perhaps unsurprisingly, given the revolving doors at numbers 10 and 11 Downing Street, none of these dreams have come to pass. The Royal Mint is yet to issue an NFT, although it may have missed the boat. Meanwhile concrete plans for a digital Gilt are yet to materialise — although perhaps the government has kept the Debt Management Office busy enough in recent weeks.
That is a pity as there is a crying need for authoritative and trustworthy digital financial infrastructure of the sort trusted state institutions are best placed to provide. That may not be the dream of the anarcho-crypto evangelists but for the vast majority that simply need a financial system they can rely upon, it is what will drive mass acceptance of digital finance.
However, it is not as if nothing at all has been done. The government has taken steps to introduce a regulatory framework for stablecoins, having voted to include crypto assets in the Financial Services and Markets Bill last week.
Hopefully, it is just the beginning. Now that Sunak has ascended to the highest office in the country, he is able to shape and pass policy that he wants — including his delayed crypto plans.
Now may not be the right moment to pursue and implement these. Sunak and his chancellor Jeremy Hunt are set to present their autumn statement in just over two weeks’ time, having already delayed it from Monday.
It will be a critical piece of political action, following the Truss-Kwarteng debacle of September that d criticism from the IMF among others.
But once the fiscal path is set and credibility hopefully restored, the UK has a real chance to make headway as it attempts to maintain its position as a leader in the financial world. Many of those opportunities will lie in the digital realm and with a prime minister that appreciates its value, important work lies ahead.