UK Treasury’s Stance on Cryptocurrency
Emma Reynolds, the Economic Secretary for the UK Treasury, has dismissed the notion of establishing a national cryptocurrency reserve in Britain. During her address at the Financial Times Digital Asset Summit held in London, Reynolds emphasized that the UK would not follow the United States’ example in amassing Bitcoin.
“We consider such a move as unsuitable for our market,” she stated.
While acknowledging the U.S. government’s direction, she clarified,
“that’s not the approach we intend to take.”
Collaboration with the U.S.
Despite ruling out a crypto reserve, Reynold highlighted that the UK seeks to foster collaboration with the U.S. in other financial sectors. She cited the recent discussions between the UK Chancellor of the Exchequer and U.S. Treasury Secretary Scott Bessent, which have also led to the formation of a working group comprising senior officials from both nations. This regulatory forum is slated to convene in June, primarily to address cooperation mechanisms related to digital assets.
Reynolds noted the significant policy shift in the U.S. regarding cryptocurrency since the Trump administration, which has impacted the current regulatory environment.
Innovations in Sovereign Debt
Looking to innovate within its financial structure, the UK is exploring the possibility of issuing sovereign debt facilitated by distributed ledger technology. Reynolds mentioned that the government is in the process of selecting a supplier for this venture, with hopes to finalize the decision by late summer.
Regulatory Approach and Challenges
In contrast to the EU’s Markets in Crypto Assets (MiCA) framework, Reynolds stated that the UK would not replicate their tailored regulatory regime. Instead, she emphasized a focus on outcomes tailored to the UK’s unique legislative context, which diverges from EU norms.
Furthermore, Reynolds outlined the UK Treasury’s viewpoint on crypto regulations, asserting that such oversight should remain aligned with traditional financial services. She articulated,
“Essentially we’re saying, ‘Same risk, same regulatory approach.'”
Nonetheless, she acknowledged that the inherently decentralized nature of cryptocurrencies such as Bitcoin complicates regulatory efforts, admitting,
“There’s only so much the government can do in that regard. Some aspects of this space are rather elusive and problematic to regulate.”
Edited by Stacy Elliott.
