Why Blockchain and Cryptoassets are "The biggest gift to the Regulator - possibly ever - certainly in a generation!”
Why Barry E James saw fit to write an open letter to Philip Hammond, Chancellor of the Exchequer, titled ‘Britain Leading the World – or Losing a Historic Opportunity Forever’
Think of Britain. Traditionally a world leader in financial services. The nation that gifted to the world its model Parliament; its open and evidence-based legal system; even, through Sir Tim Berners-Lee, the web on which we all operate, all around the globe.
On the brink of Brexit and already facing an uncertain social and economic future, Britain now faces missing out on an unimaginable opportunity. But it’s not too late - yet!
This week, Founder of ICO Radio Barry E James answers questions - and raises more - about why he felt compelled to write an impassioned letter to the Chancellor, to make the case for supporting blockchain entrepreneurship, and advocating a new approach to innovation in regulation.
He outlines the Government’s own pledges of support, including from Margot James, Minister of State for the Department for Digital, Culture, Media and Sport, who addressed the industry a few weeks ago in glowing terms, talking about the importance of transparency and how the UK needs to be the first choice of those looking to set up a blockchain business.
And contrasts this with the evidence that businesses transacting in cryptocurrencies or funded by them, are unable to set up bank accounts, or are having established accounts frozen and shut down, making it impossible to do business in this country.
Strange indeed! Until he found out why.
Barry was recently handed a letter from the FCA addressed to CEOs of banks and headed ‘Crypto Assets and Financial Crime’, in which they are made aware in no uncertain terms that if they even considered banking such companies, life would be made very difficult.
Barry goes on to discuss the contrast between the views of the Bank of England, the recent APPG on blockchain, and the Government itself, at least open to the opportunities that could be on offer; and in the other corner, the FCA quietly throwing up barriers. Criminalising the very technologies other countries are trying to attract. Countries including as South Korea who recently pledged $100m to create a Smart City to attract more blockchain entrepreneurs, an approach being echoed in Berlin, Malta, Gibraltar, and in jurisdictions all around the world.
Barry’s letter states that this is a moment of huge opportunity for Britain; we are seeing the rebuilding of the internet as a secure environment, and as a nation we should be leading this. But instead we’re driving the very talent we need to make it happen, away. As he says, the Government needs to go beyond a defensive position on crypto assets and instead move towards becoming as open and positive as other countries - in fact, the UK is the best placed of all.
His advice to the regulator is to analyse its own role, and to see that well-made regulation, fit-for-purpose, not only gives a solid framework for a safer environment for both industry and consumers, but becomes an asset in itself for any regulated business. It is more than just a way to limit fraud, bad actors, malfeasance; and the transparency of blockchain is many times more powerful than heavy regulation. Blockchain itself is a public infrastructure that doesn’t need a perimeter. It allows a trusted network of systems, of machines, of transactions, that cross every border - this is the time for unimaginable opportunities and benefits worldwide as the next variant of the internet.
And the UK needs to be at the forefront.
Barry’s final thought is that he would like to see the UK set up, and bring others together, in a ‘World First’ Taskforce. Putting the world first. Addressing poverty, inequality. And what right-minded person, whether regulator, MP or regular Joe on the street, wouldn’t want to join him in that?