A former UK chancellor has raised concerns that the country is falling behind rivals in the European Union when it comes to crypto regulation.
Philip Hammond, who served as the UK’s Chancellor of the Exchequer from 2016 to 2019, told Bloomberg that there is a clear lack of direction and cohesion when it comes to crypto policy.
“Particularly in the area of digital asset trading, I think the UK has missed a trick […] We are getting closer to the point where it will be too late. Other jurisdictions are racing ahead of us.
“The problem is that there is no regulation, and nobody knows exactly where it is, right? It’s a bit of a Wild West, and has earned, frankly, a mixed reputation, especially among policy makers and politicians and the public.
He also pointed out that developing digital trading infrastructure will be key to transforming the UK into a hub for trading traditional tokenized assets, such as tokenized stocks and tokenized bonds.
“Getting it right, setting the rules for digital commerce, will be an essential prerequisite for being a player in the digitization of traditional financial assets.”
“The jurisdictions that have embraced this technology that have regulated it properly and effectively will be the ones that grow those markets and they will become the new hubs.”
The former minister’s criticism came despite promises from the UK government in May to introduce legislation to regulate the crypto industry.
Hammond said that while the country has been “very nimble in adopting new technologies” in the past, it hasn’t been so evident when it comes to crypto regulations, adding that this was likely due to a mix between a “bandwidth problem” and a “capacity problem”.
“This is a whole new area of technology. It is very difficult for public sector organizations with public sector salary structures to recruit the best and brightest in these fields.
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“Personally, I think that [Financial Conduct Authority] FCA should have gone to the industry and said we need secondments. We can’t, you know, we can’t hire the people we need. We need the industry to provide us with the talent to develop the regimes we need to introduce.
In their defence, Hammond said regulators have faced a period of immense stress over the aftermath of Brexit, Covid-19, and its impact on their own working arrangements.
Hammond is no stranger to the crypto industry, currently being a senior adviser to copper.co since October 2011, a London-based start-up that provides custody and infrastructure services in the digital asset industry.