This is the 5th article in the series which covers the importance of the G20 countries in the global legalization of crypto.
The United Kingdom is one of the biggest economies in the world and Europe. It is a manufacturing and financial services hub.
Regulators see crypto from a largely positive lens.
To understand the importance of UK in a global setup let’s have a look at some statistics.
Important Statistics of the UK
The United Kingdom is the 6th largest economy $2.75 trillion in 2020.
It has a population of 6.7 crores.
The country also holds significant power at multilateral organizations.
It holds 4.07% of the voting power at the International Monetary Fund and 3.85% of voting power at the World Bank.
United Kingdom has replicated the same performance in crypto space.
The UK recorded more than 5 million visits to DeFi platforms by its citizens who sent over $2.5 billion of retail value on the DeFi platforms.
Within Europe it is the leader when it comes to receiving cryptocurrency, leading by a wide margin at $170 billion, 49% of which is from value sent to DeFi protocols.
That’s why it achieved a rank of 21st on the Chainalysis Global Crypto Adoption Index and 5th in the Global DeFi Adoption Index.
Stance of Regulators on Crypto Regulation
Crypto is not illegal in the country but regulators are sceptical about it.
Bank of England has called for strict regulation as financial stability risks posed by crypto can grow exponentially.
In 2021, the advertisement regulator went on a crackdown spree. It prosecuted advertisements that it considered were misleading.
Financial Conduct Authority (FCA) also has tightened its AML and KYC rules. Further, it has increased the number of companies under its sight for reporting financial crimes from 2500 companies to 7000 companies and banned the sale of derivatives and exchange-traded notes.
FCA CEO, Mr. Nikhil Rathi is of the opinion that “anything is crypto-related should not be entitled to compensations”. He means that losses arising due to crypto scams should not be compensated.
In November 2021, the Her Majesty’s Revenue and Customs (HMRC) began levying digital services tax on crypto exchanges.
UK Law Commission brought smart contracts under the ambit of English and Welsh law by considering them as enforceable agreements/contracts.
It is certain that the United Kingdom (UK) sees crypto from a sceptical view, but it does not want to curtail innovation.
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