Crypto-hub Britain: what the experts think

(Image credit: Ink Drop/Alamy Stock Photo)

published 8 April 2022

Problem habit?

Addiction experts report that “young men trading cryptocurrency have begun to seek help for symptoms associated with problem gambling,” said Patrick O’Donoghue in The Sunday Times (Ireland). Barry Grant of Extern Problem Gambling warns of a “classic” progression. “You dabble with it. You do something small, you’re having a bit of fun. Maybe you’re doing a bit of research about it. Then you have a big win.” Once hooked, the lack of safeguards means it may well be more difficult “to quit crypto than it is to kick a problem gambling habit”.

The findings aren’t great news for the Treasury, which has just laid out plans to make the UK “a global hub” for the crypto industry, following criticism that its “stringent approach was throttling innovation”, said the FT. The shift in tone is welcome, but care clearly needs to be taken. The new initiative coincided with a warning from BoE governor Andrew Bailey that cryptocurrencies were the new “frontline” in criminal scams. Much of what the Treasury is proposing is uncontroversial, said Charles Walmsley on Citywire. Plans include advancing the use of “stablecoins” (online currencies pegged to the traditional, fiat sort) in payments, and creating a regulatory “sandbox” to allow businesses “to experiment with cryptocurrency models”. But the most eye-catching plan – to create an NFT (non-fungible token) via The Royal Mint – was also the most controversial. While some compare these digital assets to works of art, others argue “they are very risky investments” with no “inherent value”.

“There’s nothing wrong with the Treasury taking an exploratory walk round the crypto block,” said Nils Pratley in The Guardian. Yet the Chancellor, Rishi Sunak, has “rather undermined” the seriousness of the project by dabbling in “faddish stunts” like NFTs. Better to “stick to boring technical assessments of payment systems”. It feels as though the Treasury is ignoring all that dull stuff about “illicit activity and carbon emissions” to embrace crypto as “the best thing ever”, agreed Jemima Kelly on FT Alphaville. “Rule Bit-tannia!” and all that. Or as the crypto bros like to say “WAGMI” – “we are all gonna make it”. What could possibly go wrong?