Rishi Sunak Becomes UK’s Prime Minister: What It Means for Crypto
Crypto is not immune to dramatic changes in the world’s political scene. Sunak’s new position as the UK PM provoked reactions from stakeholders in the crypto ecosystem. Some are optimistic, others skeptical.
After heavy criticism, former Prime Minister Liz Truss resigned after only 45 days in office. In the Conservative Party leadership election that followed, Rishi Sunak emerged as the clear winner after his competitor Penny Mordaunt received only 30 votes from fellow MPs, as opposed to Sunak’s 150.
Starting out in government at a young age when he was first elected to Parliament back in 2015, he quickly rose through the ranks, becoming one of the youngest members of Prime Minister Theresa May’s cabinet. As a rising star in the UK political scene, Rishi Sunak has gained a lot of attention recently after being named as the next prime minister. At only 42 years of age, he has become the UK’s first Prime Minister of color, the youngest in more than two centuries, and the first Hindu to hold the position.
Now that Sunak has been chosen as the new PM, many are excited to see what he will be able to accomplish in his new role. He is highly regarded as an innovative thinker, which should serve him well as he takes on this challenging new position. Crypto experts are optimistic about Sunak’s appointment as the new UK Prime Minister. Sunak is known to be supportive of cryptocurrency and blockchain, so major reforms could be on the horizon for the industry.
What Sunak’s Appointment Means for Crypto
In her short stint as PM, Liz Truss and her government showed they were dedicated to following Rishi Sunak’s plans for cryptocurrency. However, her abrupt resignation threatens to disrupt cryptocurrency’s course in the UK. Having already been in talks with Sunak about cryptocurrency policy during his time as finance minister, the local crypto industry greeted Sunak’s appointment as the head of government warmly.
Adam Jackson, from UK tech industry body, Innovate Finance which advocates for crypto, called Sunak a “champion of fintech” after his appointment as prime minister was announced. Ian Taylor, director of CryptoUK, an industry lobby group, said, “It’s a positive for the general economy, and therefore, crypto”.
According to initial reports, the government’s approach will be centered on testing and experimentation, with a “financial market infrastructure sandbox” set up to allow firms to experiment and innovate in the realm of cryptocurrency and blockchain technology. Additionally, a dedicated Cryptoasset Engagement Group will work closely with industry stakeholders to find ways to enhance the UK’s tax system and its competitiveness in order to encourage further growth within this burgeoning sector.
Overall, this new crypto-asset strategy represents an important and timely step in the ongoing evolution of crypto-assets, signaling the UK government’s commitment to supporting innovation within this dynamic and rapidly-expanding field. Furthermore, by promoting stablecoin technologies and other cutting-edge innovations, the strategy is likely to help catalyze further growth within the crypto-asset space, positioning the UK as a global leader in this emerging industry.
With Sunak’s appointment, those in the blockchain industry believe that there could be a major change in cryptocurrencies. During his tenure as finance minister under former Prime Minister Johnson’s regime, Sunak had indicated a desire to turn the UK into a hub for cryptocurrencies.
In April he stated, “We want to make our country a global crypto-assets hub. Our goal is to see the businesses of tomorrow, and the jobs they create, here in the UK”. The day before Sunak’s inauguration, the House of Commons voted to pass a cryptocurrency bill regulating them as financial products and instruments. Soon after UK PM Sunak announced his new plans for the economy, Scottish National Party Lisa Cameron, who is also chair of APPG’s Crypto and Digital Assets All Party Parliamentary Group called on the British government to be more explicit about its support of cryptocurrency.
As finance minister under Boris Johnson, Sunak announced the Financial Services and Markets Bill, which – if enacted – could grant local regulators extensive control over the crypto industry.Rishi Sunak’s crypto-friendly reputation preceded him when he became Prime Minister of the UK, and many in the industry expect positive changes for cryptocurrencies under his rule. Despite this, a large portion of the UK population is still apprehensive about investing in digital currencies. With Sunak’s appointment, we could see a shift in this thinking. However, Rishi Sunak has been a long-time proponent of the Central Bank Digital Currencies (CBDCs), which leaves…
Room for Doubt
Central Bank Digital Currencies (CBDCs) are decentralized currencies issued by central banks. Compared with cryptocurrencies, namely Bitcoin and Ethereum, CBDCs are supported by a central bank, which is responsible for maintaining price stability. The value of a digital currency is pegged to that of fiat money. Unlike physical currency, which takes the form of notes and coins, digital or electronic currency is an amount on a computer or similar device. UK citizens have unofficially named this possible UK digital currency as ‘digital sterling’ or ‘Britcoin’.
Sunak’s (Scrapped?) Plan to Introduce Britcoin
In the summer of 2021, he proposed transitioning the UK economy to run on CBDC, a central bank digital currency, dubbed “Britcoin,” by 2025. The reaction was mixed. While some argue that Britcoin would streamline digital transactions and reduce bank costs, others are concerned about how it might affect interest rates and other financial regulations.
Privacy concerns are an important consideration when it comes to the state’s relationship with individual bank accounts. Not only would government officials have full access to transaction details, but they could also theoretically cut off a person’s money supply.
Sunak has previously spoken highly of CBDC and its advantages, so it will be curious to see if the concept resurfaces during his tenure as prime minister. It remains to be seen if he will side with crypto or back CBDC.