In its ambition to be a global crypto asset hub, the UK faces significant obstacles that threaten to impede progress in the crypto space. The dual challenge involves hurdles related to retail customer access to crypto products and the complexities surrounding companies attempting to open and maintain banking accounts within the UK.
Retail Customer Access at Risk
Retail customers' ability to access crypto products faces a critical challenge and a driver behind this seems to be the stringent app reporting requirements imposed by the Payment Systems Regulator (PSR). While these measures enhance risk management, they inadvertently deny potential customers access to essential financial services, creating a roadblock for crypto businesses.
Banking Woes for Crypto Companies: A Stifling Effect
Crypto companies in the UK encounter difficulties in opening and maintaining banking accounts, compelling many to resort to operating offshore. This limitation stifles innovation, scalability, and the introduction of new products and services on a global scale.
International examples showcase that banks can support crypto-related businesses while ensuring regulatory compliance. Many jurisdictions throughout the world have implemented measures to prevent discrimination against regulated cryptoasset service providers, thus fostering confidence in banks and enhancing transparency. In contrast, the UK's challenges have led some businesses to seek banking services in other countries, raising concerns about concentrated risks within the sector.
Blockchain Advocacy in Parliament: A Call for Action
In response to these challenges, Member of Parliament Natalie Elphicke is calling for the UK government to do more to harness the power of blockchain technology.
Speaking at an event hosted by the All Party Parliamentary Group on Blockchain Technologies, Elphicke emphasized the need for the UK to lead in understanding and applying blockchain technologies. She sees blockchain's potential in providing transparency in global supply chains, digital identity, and data purposes.
Regulatory Pace and Collaboration: Keys to Success
Elphicke urges the UK to match the pace of international regulators and collaborate with other countries on blockchain issues. While the UK has expressed its desire to be a crypto hub, it has done little in terms of blockchain policy. The blockchain APPG group, chaired by Elphicke, plans to launch round table discussions and seek industry input on how the UK can harness skills, opportunities, and diversity in blockchain.
Outlook for the UK Crypto Landscape
The challenges faced by the UK crypto industry in banking and regulatory domains are at a critical juncture. As the country aspires to be a global crypto asset hub, addressing these obstacles becomes paramount. The intersection of regulatory frameworks, banking services, and parliamentary advocacy will shape the future trajectory of the UK's crypto landscape.
