The
U.K.
election
is
July
4,
and
polls
indicate
a
new
Labour
government
is
inevitable.
The
crypto
ecosystem
in
the
U.K.
has
grown
steadily
under
various,
almost
exclusively
Conservative,
governments
since
the
birth
of
Bitcoin
15
years
ago.
So
what
does
this
change
in
leadership
spell
for
the
future
of
crypto?
Laura
Navaratnam
is
the
U.K.
policy
lead
for
the
Crypto
Council
for
Innovation.
The
views
expressed
in
this
column
are
those
of
the
author
and
do
not
necessarily
reflect
those
of
CoinDesk
Inc.
or
its
owners
and
affiliates.
Prior
to
the
election
announcement,
the
industry
had
grown
accustomed
to
a
government
that,
as
of
late,
generally
understood
and
supported
crypto.
In
2022,
John
Glen,
the
Economic
Secretary
to
the
Treasury
(also
known
as
the
City
Minister)
pledged
to
make
the
U.K.
a
global
hub
for
crypto-asset
technologies.
This
vow
was
repeated
by
his
successors
Andrew
Griffith
in
2023
and,
most
recently,
Bim
Afolami,
who
has
urged
regulators
to
take
care
in
policing
the
crypto
industry
to
make
sure
its
success
isn’t
“undermined.”
Broad
powers
were
introduced
in
the
Financial
Services
and
Markets
Bill
bringing
stablecoins
within
the
regulatory
purview
of
the
Financial
Conduct
Authority,
and
clarity
on
the
treatment
of
staking
was
promised.
Now,
with
Labour
polling
around
41%,
we
are
days
away
from
a
wholesale
change
in
14
years
of
Tory
leadership.
Labour
published
its
manifesto
two
weeks
ago.
There
were
no
references
to
digital
assets
or
anything
adjacent.
More
surprisingly,
there
was
no
reference
to
financial
services
entirely.
We
can
only
assume
Labour
has
not
developed
a
position
on
crypto
and
blockchain
technologies
–
but
this
will
need
to
change
quickly.
Fortunately,
there
are
some
areas
where
Labour
could
quickly
make
positive
impacts
without
having
to
commit
huge
amounts
of
time
or
resources.
Finalize
regulation
on
stablecoins.
In
order
for
regulators
to
consult
on
rules,
the
next
government
must
lay
the
final
legislative
instrument
to
bring
stablecoins
within
the
regulatory
perimeter.
Based
on
previous
promises
that
this
would
be
done
by
the
summer,
the
legislation
is
likely
ready
and
waiting.
The
incoming
Labour
government
needs
to
rely
on
its
Treasury
policy
experts
and
pass
this
legislation.
Regulatory
clarity
on
staking.
Again,
this
is
an
area
where
the
industry
has
been
promised
clarity.
As
staking
is
a
fundamental
activity
which
ensures
the
continued
security
and
evolution
of
blockchain
networks,
where
and
how
it
might
be
captured
by
financial
services
regulation
is
crucial
to
understand
and
get
right.
Guidance
on
financial
promotions.
The
so-called
FinProm
rules
have
been
effective
for
six
months,
and
the
territorial
breadth
combined
with
rigorous
specificity
is
creating
regulatory
daisy
chains
across
the
industry,
as
firms
with
debatable
relevance
fall
under
its
purview.
It’s
time
to
review
the
original
policy
intention
and
give
the
industry
clarity
on
what
is
and
isn’t
in
scope.
The
digital
assets
ecosystem
isn’t
going
away.
Regulators
globally
understand
that
to
maintain
a
competitive
market,
they
must
embrace
Web3
and
crypto
assets,
and
introduce
robust
but
proportionate
regulatory
regimes
to
manage
the
new
reality.
Without
swift
and
decisive
action
from
the
new
government,
the
U.K.
will
fall
from
a
global
leader
in
innovation
to
a
fast
follower
behind
jurisdictions
like
the
European
Union
and
southeast
Asia,
where
regulatory
regimes
are
in
place.
Such
concessions
are
hard,
perhaps
impossible,
to
claw
back.
