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SwC Manifesto: Making the UK a Leader in FinTech, Digital Assets & Tokenisation

TLDR: The next Government should promote the UK as a world leader in fintech, digital assets and tokenisation to generate investment, innovation and a more digital economy. This will drive productivity, growth and jobs across the UK economy, as well as improvements in the UK’s public services. To get involved with Stand With Crypto UK, visit: https://uk.standwithcrypto. org/

By Policy

International

, June 13, 2024

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Just a few weeks ago, Stand with Crypto (SwC) in the UK launched in London with an event in the House of Commons. Little did we know that Prime Minister Rishi Sunak would call an election that very same week. This makes the launch of Stand with Crypto in the UK even more timely for shining a spotlight on the web3 entrepreneurs that are building their businesses on the blockchain, driving real world use cases, and solving society’s problems through this transformative new technology.

We believe the next Government should take meaningful steps to position the UK as a global hub of digital assets, tokenization and fintech. These are Stand with Crypto in the UK’s recommendations for delivering on this ambition.

Recommendation 1 Promote the UK as a global web3 and tokenisation hub: Deliver a strong political message that the UK is open for business for fintech, Web3 and crypto asset firms, and establish a joint industry-Government taskforce to foster dialogue, to identify opportunities and steps that can be taken to position the UK at the forefront of this technological revolution.

Recommendation 2 Deliver a Comprehensive Regulatory Framework for Crypto Assets: Move at speed to legislate for the broader regulatory framework for crypto assets - based on the principle “same risk, same regulatory outcome” - to protect consumers, raise standards across the industry and give firms the confidence to invest and grow in the UK. Further, lay legislation to regulate fiat backed stablecoins that delivers a mixed payments ecosystem and greater competition in the payments space (by allowing stablecoins to compete with other forms of digital money).

Recommendation 3 Deliver Regulatory Clarity on Staking (the consensus mechanism for proof of stake blockchains): As a matter of priority, lay secondary legislation that recognises staking as a new regulated activity and preserves retail participation, which is critical to proof of stake blockchains and all the innovation taking place on top of them towards web3.

Recommendation 4 Promote the unique benefits of decentralisation: The Government should undertake detailed policy work to understand the unique characteristics of decentralisation. Decentralised networks represent more than a financial breakthrough; they hold the promise to revolutionise every facet of our economy, from education and healthcare to energy, telecommunications, creative industries, and social media. As we enter the era of web3, this technology will enable a more decentralised and community-driven internet.

Recommendation 5 Deliver a Cross Govt Strategy for Blockchain Technology: The UK should recognise the transformative potential of new technologies across all Government departments and sectors of society (education, health, environment, businesses and supply chain). A smart cross- Government embrace of blockchain, led by the Department for Science, Innovation and Technology (DSIT), will drive efficiency gains across all public services, and put the UK ahead of all other jurisdictions.

Recommendation 6 Deliver a Tokenisation Strategy for the City: Deliver a strategy for the City that puts tokenisation at its heart, which includes overturning the UK’s prohibition on retail access to crypto Exchange Traded Notes (ETNs). The UK is delivering its digital services sandbox (DSS) for the treatment of security tokens to provide a safe space for innovation outside traditional financial markets rules. The UK should also provide a sandbox environment for all actors (banks, exchanges, tech firms) to trial new ways to tokenise real world assets, beyond securities.

Recommendation 7 Update the UK’s Legal Frameworks for Digital Assets: Make important changes to the UK legal framework based on the Law Commission recommendations to reflect tech developments (ie delivering certainty on digital property rights and a crypto collateral regime).

To get involved with Stand With Crypto UK, visit: https://uk.standwithcrypto. org/

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