Labour Party has to keep Sunak's Crypto dreams alive

Rishi Sunak's crypto dream is about to pop, with the Labour Party still in a deadlock when it comes to the regulations they would like to set for the country. Months have passed since Keir Starmer won the UK election, but the Labour Party has yet to announce their stance when it comes to digital assets. Experts are saying that the Labour party's indecisive could be detrimental to the country as the country might very well fall behind if a decision isn't made soon.

Stingent regulations

Two years ago, when Rishi Sunak was the then Prime Minister of the UK, he released a blueprint to make the country a global crypto hub. His plans would include bringing stable coins within the regulatory parameters and getting the Royal mint, the official U.K coin maker, to launch a nonfungible token. But this promise seems so far away today. It was reported that the last entity the Financial Conduct Authority registered was in February. Data has also shown that the FCA has received 34 applications in the past year, with only 4 being successful. These four firms are brokerage firm Interactive Brokers, crypto exchange Bitstamp, Nomura-backed crypto custodian Komainu, and payments giant PayPal.

In the UK, all firms have to register with the FCA if they were to offer services like crypto trading or providing wallets. The FCA published a report this month, boosting how well many crypto firms in the UK abided by the regulations that were required from them to invest in significant technical developments. The organisation also explained that the low rate of registration was due to how many crypto companies failed to meet the FCA's anti-money laundering requirements. FCA claims that that the high standards that were set by the organisation was to make sure that all companies that register are fit and proper and have adequate systems to identify and prevent flows of money from crime. The strict standards also protect people and the integrity of the financial system.

Promotion rules take a bite

The high number of withdrawals could also be caused by the FCA's new advertising rules. In October 2023, the regulator's strict standard on marketing of financial products was extended to crypto companies. Firms have to ensure that their advertising is clear and free of ambiguity, and consumers have to be informed of all the risks of investing. These rules make it not only makes it more complicated than it needs to be, but also more expensive to produce.

Can the UK dream survive without Sunak

With the current change in office holders, many are wondering if the UK could achieve Sunak's crypto dream without him. Although it already has been a few months since Keir Starmer won the election, it seems that the labor party has yet to make known its stance when it comes to digital assets. We can only assume that Labour has not yet developed a position on crypto and blockchain technology.

But it seems that Labour has to make their position known soon, or else the country might fall from a global leader in innovation to a fast follower behind jurisdictions like the European Union and Southeast Asia, where regulatory regimes are in place. Such concessions are hard, and some might even say impossible to claw back.