The UK is already well known for it’s negative stance on cryptocurrency, which lawmakers seem to perceive as a threat to the empire. After all, despite the continued rise in the crypto economy and it’s increased recognition around the world, the UK is of the opinion that cryptocurrency is “still intrinsically worthless”.
Now, according to reports published in the Financial Times, The Financial Conduct Authority (FCA) is considering a potential ban on the sale of cryptocurrency derivatives.
The UK government’s full thinking on the matter is outlined in black and white in the recently published paper from the cryptoassets taskforce’s ‘Final Paper’. In the introduction to the paper, it is stated that
“Mainstream financial services firms are taking first steps into the [cryptocurrency] market, and a small derivatives market is developing. At the same time, there is growing evidence of harm to consumers and markets…There is limited evidence of the current generation of cryptoassets delivering benefits.”
The report continues it’s attack on all things crypto with the ‘observation’ that
“There are substantial potential risks associated with cryptoassets, and the most immediate priorities for the authorities are to mitigate the risks to consumers and market integrity, and prevent the use of cryptoassets for illicit activity.”
If anything, it is the repeated reference to the potential of cryptoassets to threaten market stability that reveals all. Underlying the government’s outwardly hard and tough stance there is a real fear that seems to point to the pound being a lot more fragile than they’d like us to believe. When you combine this with the Brexit backdrop, such deep-rooted fear for the Great British Pound’s future may well be justified. What is not, however, justified is the way that cryptocurrencies are at the receiving end of this bottled up tension, in the same way that the child getting bullied at school is rarely to blame.
Despite such a bold anti-crypto tone, the report is summarised with a far vaguer statement –
“Given the complexity and new challenges presented to traditional forms of financial regulation, more time is needed to consider how regulation can meaningfully address the risks posed by exchange tokens, such as bitcoin.”
So actually, it would appear that the risk is rather unspecific. or at least, the reaction.
Ultimately, only time will tell if the UK really is able to push through and introduce enforceable bans on cryptocurrency transactions. Nontheless, the message is clear – Britain wants nothing to do with it for the foreseeable future, and the latest official word on the issue is likely to be a big red flag for entities that were previously eyeing investing in the UK.