The UK’S plans to “robustly” regulate the cryptocurrency industry must be championed and highlight that “digital is the future of finance”, says the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The comments from Nigel Green of deVere Group come as the UK government plans to bring the cryptocurrency sector under the umbrella of mainstream financial services regulation.
The Treasury said it would unveil a series of proposals late on Tuesday to “regulate a broad suite of crypto asset activities, consistent with its approach to traditional finance.”
It will also temporarily backtrack on a previous vow to align the regulation of crypto promotions with the regulations applied to stocks, shares and insurance products.
The deVere Group CEO notes: “The UK’s decision to regulate crypto must be championed as digital currencies, including Bitcoin, are set to play an ever greater role in the domestic and international financial system, and they should be held to the same standards as the rest of the system.
“The news that digital currencies are being brought into the regulatory tent in one of the world’s largest economies and most highly-regulated markets shows that crypto is now mainstream. It has come of age.
“A strong regulatory framework will help protect investors, tackle criminality, and reduce the potential possibility of disrupting financial stability.”
He continues: “It also offers a potential long-term economic boost to the UK as digital is the inevitable future of finance.
“This move will help further position Britain as a global hub for crypto and fintech more generally.
“It will help attract the businesses of tomorrow – and the jobs they create – in the UK, as effective regulation gives them the confidence they need to think and invest long-term.
“We also expect this development comes as the government has expressed interest in launching its own ‘Britcoin’, or central bank-backed digital currency (CBDC).”
This news will further strengthen the case for cryptocurrencies and is likely to have a positive impact on the prices of the major digital tokens, says Nigel Green.
“The move to regulate illustrates that retail and institutional investors are increasingly aware of the inherent characteristics of cryptocurrencies like Bitcoin, which has the core values of being digital, global, borderless, decentralised and tamper-proof.”
According to the results of a study by deVere Group, 82% of high net worth clients, with between £1m and £5m of investable assets, sought advice on cryptocurrencies.
“Wealthy investors, a typically conservative cohort, also understand that digital currencies are the future of money, and they don’t want to be left in the past.”
The deVere CEO believes that this momentum of interest is set to build further as the bear market, or so-called ‘crypto winter’, of 2022 is thawing.
“Bitcoin is on track for its best January since 2013 based on hopes that inflation has peaked, monetary policies become more favourable, and the various crypto-sector crises, including high-profile bankruptcies, are now in the rear-view mirror,” he says.
“The world’s largest cryptocurrency is up over 40% since the turn of the year, and this will not go unnoticed by investors and others who want to build wealth for the future.”
He concludes: “regulation will further shore up the crypto sector and further instil trust and confidence for investors. This will have a beneficial impact on the price trajectory long-term.”