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UK Finance Minister to Probe Banking Challenges Faced by Crypto Firms

Ruholamin Haqshanas
Last updated: | 2 min read
Source: AdobeStock / Mary

The finance minister of the United Kingdom has pledged to look into the reported difficulties faced by licensed cryptocurrency firms in opening business accounts in the country. 

Chancellor of the Exchequer Jeremy Hunt has agreed to meet with Economic Secretary of the Treasury Bim Afolami to discuss this issue, following a question raised by Lisa Cameron, Chair of the Crypto and Digital Assets All-Party Parliamentary Group.

During the parliamentary session, Hunt expressed his commitment to addressing the matter and acknowledged the importance of regulating the crypto market responsibly.

He emphasized that the UK, particularly London, has emerged as a global hub for cryptocurrencies.

In line with the government’s objective to foster the growth of the crypto industry, the country has introduced legislation to regulate stablecoins and promote crypto services.

“To make sure that the crypto market really can take off in the way that was intended in a responsible way we need to regulate it, which is why we have introduced legislation for stablecoins and for the promotion of crypto services.”

UK Working to Position itself as a Crypto Hub

The UK has been actively positioning itself as a prominent player in the crypto space. 

In April 2022, Prime Minister Rishi Sunak unveiled plans to transform the nation into a “global crypto hub.” 

Since then, the government has taken significant steps to support this vision, including the introduction of regulations to oversee the Digital Securities Sandbox initiative.

Back in October, the Financial Conduct Authority (FCA) implemented some new rules pertaining to digital assets, which require crypto firms to register with the financial regulator and have their marketing materials approved by an FCA-authorized firm.

These rules, which will be effective from January 8, 2024, fall under the Financial Services and Markets Act 2023 (FSMA). 

The DSS will serve as a platform for regulators and companies to test innovative solutions, such as distributed ledger technology and the tokenization of securities.

As reportedBim Afolami has been appointed as the economic secretary to the Treasury of the United Kingdom, where he will have authority over policies that impact the adoption of digital assets and central bank digital currencies within the country.

In a recent interview, Afolami emphasized the need for regulators to strike a balance between effective oversight and allowing room for innovation and growth.

He highlighted the futility of creating overly cautious regulatory environments. 

“There’s no point having the safest graveyard. Animal spirits need to be there, we need to innovate, we need to drive growth and initiative,” he said. 

Furthermore, Afolami backed the recent decision by financial regulators to lift the cap on bankers’ bonuses, highlighting his intention not to introduce measures to monitor pay within the sector. 

“It’s really important that we don’t tar every crypto business as being like FTX or Binance.”