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July 17, 2018

UK Set to Become Global Crypto and Blockchain Hub, Report Suggests

UK Set to Become Global Crypto and Blockchain Hub, Report Suggests
UK Set to Become Global Crypto and Blockchain Hub, Report Suggests

The UK has all the required resources to become a global hub for blockchain technologies and cryptocurrencies within the next few years, a report published on Monday suggests.

The 960-page report authored by analytical companies Big Innovation Centre, DAG Global and Deep Knowledge, reveals that since 2017, over £500 million worth of investment has been poured into UK blockchain companies. This, combined with the UK's existing leadership in FinTech, as well as industrial and regulatory support led to the report's conclusion that the UK has the potential to become a world leader in the digital and crypto economy ecosystem by 2022.

DAG Global co-founder and CEO Sean Kiernan commented in a press release announcing the research findings: “The UK is a major global financial hub and in recent years has become a fintech leader as well. At the same time, it is starting to demonstrate significant potential to become a leader in blockchain technologies and the crypto economy. The gap between the two worlds of traditional finance and crypto economy remains, but in the coming years we can expect this to lessen and eventually disappear.”

“Blockchain has been recognised by the UK parliament as a very important and disruptive technology, and it has shown commitment to support the accelerated development of the digital economy via a variety of government initiatives,” Big Innovation Centre CEO Birgitte Andersen elaborated.

The UK has not been historically bullish on cryptocurrencies, however. Last month, the country’s Financial Conduct Authority (FCA) issued a warning on cryptocurrencies, informing British banks about the potential risks posed by this new asset class and advising them to increase their scrutiny of clients offering crypto-related services.

Last September, the authority also released a formal warning on Initial Coins Offerings (ICOs), stating that they constitute “very high-risk, speculative investments”. In November, the FCA also warned about cryptocurrency Contracts for Differences (CFDs), which are a type of derivative trading. Around a month later, the FCA CEO Andrew Bailey said in a BBC interview that buying Bitcoin represents similar risks like gambling and, since it is neither backed by central authorities nor regulated, the cryptocurrency is not a safe investment.

The UK is expected to reveal cryptocurrency regulations later this year. In March, the FCA announced that it will be collaborating with the UK Treasury Committee and the Bank of England in drafting a discussion paper on various aspects, risks, and opportunities presented by cryptocurrencies.

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