The State of Crypto in the UK 🇬🇧 [ Future Crypto Hub or Failed Economy? ]

On today's CoinMarketCap Episode, we will discuss the current state
of crypto in the United Kingdom And whether it's a future crypto hub
or failed economy. The United Kingdom's
economy has not exactly been A shining example In the past
year, high inflation rates and rising Interest rates has resulted
in a projected recession in 2023. With the economy expected to shrink 1.3%,
according to KPMG, the back to back Challenges placed the UK
under great strain and also forced The government to enact More than a few controversial policies
to get it back on track. But despite a turbulent last quarter,
the UK actually appears To be moving in the right direction. And with the new leadership
and the change in strategy, It could actually be on track to separate
itself from the other G20 countries. In terms of crypto adoption, 6.2% of Brits
actually Own cryptocurrency,
according to an estimate by TripleA. Meanwhile, chain analysis is 2022
Global Crypto Adoption Index places The United Kingdom at 17th And is only one of two high
income countries in the top 20. The other being the United States. The country is now
set to embark on a major push To not only restore its economy, But also reinvent itself
as a global crypto hub, potentially Multiplying its crypto tax revenue
and importing a host of new talent. But will it work? Well, we have to talk about the collapse
of the pound sterling. So the GBP has been on a negative trend
against the USD, losing over 40% Of its value since 2017,
after it hit a record high Of 2.06 GBP per USD. This downtrend accelerated
dramatically between June of 2021 And September of 2022, during
which the pound lost More than 26% of its value
against the dollar. In 15 months. Ouch. Owed to the bungled execution of Brexit,
sustained political turmoil,

Hiking interest rates, energy crunch,
and also the poorly received. And now largely scrapped mini budget. The pound has seen its purchasing power
in relative value tank. Like most fiat currencies,
the British pound sterling Has been crushed
by the US dollar in recent months. Indeed, the USD has actually gained
at 12.90% against the GBP Over the last year,
which places it among the top four G10 currencies against the USD
and for comparison, the USD gained Just 2.15% and 4.51% Against the Swiss franc and Canadian
dollar, respectively in this time. The recent collapse of the sterling
also led to a spike in GBP two Bitcoin Trading volume, sending it to a one year
high in September of 2022. As per published by Kaiko, Bitcoin GBP
Trading volume actually spiked as traders Look to profit from the volatility
of the GBP or escape inflation. England welcomes new Prime
Minister on October 20th of 2022. Former British Prime Minister Liz Truss resigned from her post
after just six weeks in office, Becoming the shortest serving prime
Minister in UK history by a wide margin. This came
following two weeks of controversy And political turmoil
surrounding her now failed mini budget. Parts of our mini budget
went further and faster. The markets were expecting. Just days Later, Rishi Sunak actually was welcomed
into office as the fifth Prime Minister in the last six years
and the third this year. This was largely seen as a boon for the UK
economy, given Sunak's independence, Success as a businessman and long
storied history as a member of Parliament. Immediately following his appointment
as UK's new Prime Minister,
the pound sterling began to reclaim Some of the losses incurred
while Liz Truss Held the post with a new plan
to rescue households, bolster the economy, Guarantee wages, combat inflation
and inject new capital Into the economy, Sunak is now charged
with ensuring its revival. As a vocal advocate
of blockchain and crypto, Rishi Sunak

Is seen as a crypto friendly
PM during his post as chancellor, Sunak said It's my ambition to make the UK
a global hub for crypto asset technology And the measures we've outlined today
will help to ensure firms can invest, Innovate and scale up at this country. Sunak is now likely to introduce
a financial market infrastructure sandbox Which will allow firms to explore
the use of blockchain technology And push innovation in the sector. Last year, Sunak also proposed a UK
central bank digital currency known As Bitcoin. Yes, Bitcoin will do respect. What the hell are you talking about? 2025 was sent as the launch date
for the CBCD’s but as of yet, the UK Central bank has not made the decision
to introduce a digital currency. Tax changes in Turbulence. In September of 2022,
the UK's Chancellor of the Exchequer, Kwasi Kwarteng, delivered the
not so mini mini budget, Which was designed to tackle The cost of living crises
and boost the economy by cutting taxes, Scrapping several planned levies
and also tax hikes, freezing Energy bills and introducing several
new investment zones around the UK. Just weeks later,
almost all of the tax cuts put forward in The mini budget were scrapped
following a dramatic government U-turn. This caused significant political unrest. While news emerged that the government
may reduce the income of tax thresholds, Helping it raise more money
to actually restore the economy. The UK now has the third highest inflation
rate in Europe And a 40 year high of 10.1%
as of September of 2022, Just behind Belgium's 11.27%,
and the Netherlands 14.5%. To put this into perspective,
the average rate for the euro Area or eurozone sits at 9.9%. Right now, the UK does not exactly
stand out as a crypto haven. Crypto gains are taxed at the 20%
capital gains tax rate and businesses Do not benefit from a particularly
favorable crypto regulatory framework Since this is largely aligned

With the EU's fifth and sixth anti-money
laundering or AML directives. But with a new Prime Minister
now in office, the UK might soon Get the boost it needs to separate itself
as a global crypto hub, According to a comprehensive roadmap
laid out back in April. The UK has a multistep plan to help
position itself as a global crypto hub. Some of the measures set out in the plan
include number one, Creating regulations that make Stablecoins
a recognized form of payment. Number two, introduce a crypto asset
engagement group to work closely With the industry and tackle issues
facing the crypto asset sector. Number three
potentially improving the competitiveness Of the UK tax system to help foster
growth. And number four,
working with the Royal Mint To produce an NFT for Digital Britain. Further, in October this year, lawmakers
have voted in favor of adding Cryptocurrencies termed digital settlement
assets into the proposed Financial Services and Markets bill,
which would seek to regulate crypto As any other form
of financial instruments. This includes Stablecoins,
which are believed to have the potential To develop
into a widespread means of payment Should the government
execute these measures quickly. It could find itself a hotbed for crypto
innovation, competing directly with crypto Friendly countries like Georgia, Malta,
Singapore, Portugal and the UAE. But it will need a substantial overhaul
of its crypto taxation rules To stand a chance
of becoming a real crypto Giving that many countries
a tax crypto profits of 5% or less. With these seemingly
consecutive implosions in crypto this year And potentially fraudulent activities
from the likes of The UK is seemingly more certain
about the need for greater clarity And scope of regulation, Which they believe will allow innovation
to thrive on protecting Consumers and businesses. Echoing
this, Minister Andrew Griffith mentioned That there are questions
about the future of crypto, But we'd be foolish to ignore the
potential of the underlying technology.

The UK is certainly not ignoring
the cryptocurrency industry. The Government is consulting on a world
leading regime for the rest of the crypto Asset market later this year. But only time will tell
if and when the policy is implemented will Be effective.


Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

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