‘UK could become a global leader for issuance, trading and exchange of crypto’

As part of UK’s plans post Brexit, government’s FCA published a new review that detailed the nation’s approach to the Fintech sector, based on the recommendations of Ron Kalifa, former Wordplay Group CEO. Kalifa urged authorities to set up a Digital Economy taskforce, that would comprise experienced people hailing from government and regulatory backgrounds. The Taskforce would work on policies to overcome blockages in the sector. 

According to Kalifa’s review, UK’s fintech sector represented 10% of the global market share and over $15 billion in revenue. The total tech spent by UK firms in financial services amounted to more than $132 billion in 2019. In addition, investment into UK fintech was $4.1 billion last year, which was “more than the next five European countries combined.” 

Kalifa believed that UK could come to lead global center “for the issuance, clearing, settlement, trading and exchange of crypto and digital assets.”

The UK already has a strong position that it should capitalize on, but other jurisdictions are developing their own propositions (such as the EU’s Markets in Crypto-Assets (MiCA) proposal) and the UK needs to act quickly to preserve its position. 

UK should aim to be “at least as broad in ambition as MiCA,” but should consider whether it can develop an “innovation-driven” regime for crypto-assets and adopt a “technology-neutral approach.”

The region should “be flexible enough to deal with future challenges” such as how DeFi should be regulated. He claimed evidence that many crypto providers would “positively welcome the opportunity to be regulated.” At the same time, consumers could benefit if crypto firms become subject to enforceable regulations, he added. 

Further, Kalifa called for the establishment of over $1.39 billion fintech growth fund and recommended the creation of “a global family of fintech indices to enhance sector visibility.”