Government Must Compel Banks to Embrace Crypto, Trade Body Says

• The director of operations at CryptoUK, Su Carpenter, has advocated for the FCA to be given the mandate to provide clear crypto regulations, especially on stablecoins by the HM Treasury in a bid to attract more investors to the UK legit crypto sector.
• The outcry on banks to ensure seamless on/offramp came after Chase Bank closed its relationship with crypto businesses on October 16.

The United Kingdom has accelerated its crypto agenda in a bid to compete with other global economic hubs – like Singapore, Hong Kong, the European Union, and the United States, among others – that have been moving in the same direction.

However, a regulatory lapse has caused some traditional banks, led by Chase Bank, to sideline regulated web3 projects in the country in the process of transferring users’ funds. The move has aroused the crypto-interested stakeholders, who have been pushing for clear crypto regulatory frameworks to ensure a fair playing ground.

Moreover, traditional banks hold most of the investors’ funds seeking to invest by diversifying into the cryptocurrency industry, which has a higher potential to beat the rising inflation.

UK Government Must Intervene to Ensure Cordial Relationship Between Banks and Crypto Firms

According to Su Carpenter, the director of operations at CryptoUK, the United Kingdom’s government must intervene to ensure that traditional banks work with regulated crypto firms for the betterment of the investors. Carpenter highlighted that the decision by some banks to ban crypto-related transactions is not friendly at all to investors seeking to venture into the nascent blockchain technology.

Moreover, it is believed that traditional banks are slowly adopting blockchain technology and crypto assets and thus do not want to bleed more investors in a bunk-run version before they build their infrastructure.

However, the crypto ban has been affected due to reported money laundering amid ongoing sanctions of terrorist-related activities in the Middle East and the Russian oligarchs. In his capacity, Su Carpenter called out the banks for their risk-averse approach to crypto assets.

Moreover, the crypto assets have different use cases that outshine the negative pointed out by the banks, and in any case, blockchain technology provides enhanced measures to identify and block money laundering-related transactions as observed with Israel and Hamas. Su Carpenter told UKTN.

We acknowledge that crypto can be considered a source of fraud. But there are a lot of other areas as well that bring fraudulent activity. The risk argument that is coming from the banks isn’t necessarily underpinned by accuracy.

The CryptoUK team has been pushing for the HM Treasury (HMT) to provide clear regulations for fiat-backed stablecoins, which are said to be introduced as early as 2024. The same agenda was presented by the CryptoUK team during the Labour Party conference earlier this month. The CryptoUK noted.

We are pleased to see the Treasury acknowledge that it would be “premature and ineffective” to regulate DeFi activities currently, something which CryptoUK and its members have consistently flagged to lawmakers.

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