The former Chancellor of the Exchequer Philip Hammond is worried that the UK is falling behind its rivals in the EU in regards to regulation of crypto. He said there has been a distinct lack of direction and cohesion when it comes to crypto policy.
In the area of digital asset trading, Hammond feels the UK has missed a trick. Britain is getting very close to the point where it will be too late and other jurisdictions are racing ahead. He said the problem is that there are no regulations. Hammond acknowledged the fact that nobody quite knows where they stand. As such, it’s a bit of a wild-west. And it has gained a mixed reputation, particularly among policymakers, politicians, and the public.
The former Chancellor who served from 2016 to 2019 believes that the development of digital trading infrastructure will be key to turning the United Kingdom into a hub for trading tokenized traditional assets like tokenized equities and tokenized bonds. Hammond says getting it right – rules around digital trading – is an essential prerequisite for being a player in the digitization of traditional financial assets. He said jurisdictions that have embraced this technology, and that have regulated it properly and effectively, will develop these markets. They will emerge as the new hubs.
Hammond pointed out that the United Kingdom has been very agile in embracing new technologies in the past. But this hasn’t been as apparent when it comes to crypto regulation. It may be due to a mix between a bandwidth issue and a capacity issue. Crypto is a very new area of technology and it’s difficult for public sector bodies with public sector pay structures to recruit the best and the brightest into these areas. The former Chancellor thinks the Financial Conduct Authority (FCA) should have gone to the industry. They can’t hire the people they need. FCA needs the industry to provide it with the talent to work up the regimes they need to introduce.
He said regulators have been dealing with a period of immense stress – consequences of Brexit, COVID-19, and its impact on the work arrangements.