On 4 April 2022, HM Treasury published the keynote speech given by John Glen, Economic Secretary to the Treasury, at the Innovate Finance Global Summit during Fintech Week 2022.
Key points in the speech include:
- Year-on-year investment growth in UK fintech was up more than 200% in 2021.
- Almost half of the fintech unicorns in Europe are based in the UK and last year, the sector attracted more investment than France, Germany, Sweden, and the Netherlands combined.
- The UK is open for crypto businesses.
- The Government will seek to protect consumers by legislating to bring certain cryptoassets into the scope of financial promotions regulation, it is essential that investors understand the risks they are taking.
- As the Bank of England’s Financial Policy Committee recently noted, the Government is also mindful that as crypto-technologies grow and become more interconnected with the core financial system it will need to ensure that regulators have the right tools to manage the associated risks.
- The Government’s view is that crypto is going to impact many different sectors including financial services. Change is going to be dynamic which means that the way in which crypto-technologies are regulated also needs to be dynamic. Mr Glen adds that regulation should not be thought of as static rather there should be thinking in terms of regulatory ‘code’ which can be refined and rewritten when needed, tailored and proportionate but also nimble and tech neutral.
- On carbon footprint, the Government is looking closely at energy usage associated with certain crypto-technologies.
- The Government will be amending the Investment Manager Exemption to remove disincentives to UK fund managers including disincentives to UK fund managers including cryptoassets in their portfolios.