The Potential of Blockchain Technology and Digital Currencies in the UK
Greengage CEO Sean Kiernan talks to UK MP Lisa Cameron (SNP), chair of the Crypto and Digital Assets APPG (All Party Parliamentary Group).
Education
“One of my reasons for getting involved in the APPG was being contacted by a constituent who had been scammed by an alleged crypto firm and wanted to know what Parliament was doing to address this.”
At that time the answer was not very much, despite the fact that millions of people had already ‘engaged’ with this new industry in some capacity or other (good and bad). A particular area of focus for the APPG is encouraging more and better education and training around software and coding skills and supporting those working in industry today to upskill to transition more effectively to the new, digital world. Before educating others, however, we have had to quickly navigate a steep learning curve to get a fundamental grasp of complex, code-based constructs surrounded by much jargon and media hype.
There is a great deal of activity in the financial services sector seeking to shift the narrative away from ‘bad crypto’ sensationalism to a more balanced perspective that highlights the enormous potential of new digital technologies to deliver systemic efficiencies and indeed, social benefits (e.g. the likes of broader financial inclusion via ‘digital money’).
“Having come at this initially from quite a negative slant, the education piece has helped me to see things from a different perspective in terms of ‘technologies for the future’. We have to move forward; we just have to do it properly. Our leadership role in global FinTech enables us to harness and maximise skills and experience that already exist in the UK.”
Regulation and consumer protection
Regulatory clarity is high on the agenda for the UK government and particularly, taking an evidence-based approach, looking at what other countries are doing (EU and globally) to develop proportionate regulatory frameworks and industry best practices. Consumer protection is also critical, alongside the provision of appropriate and adequate consumer education.
“The last thing people need in a cost-of-living crisis is the promise of quick fixes without a corresponding understanding of potential risks and consequences. However, it’s hard to make informed decisions in the absence of any safeguarding rules or other consumer protections.”
Digital roads to the regions
Lisa touched on ‘digital roads to the regions’; ensuring that opportunities and benefits are not purely London- or Southern England-centric but reach across the UK, in the form of regional innovation hubs and college and university courses.
As a start point, regional innovator hubs will go a long way to harness the enthusiasm and skills of individuals wherever they are located geographically. This approach also supports vital job creation outside of London and other key ‘technology centres’, facilitating greater inclusivity, and helps expand the allocation of capital across the whole country.
International perspective
Beyond the UK, Lisa was previously a member of the government’s International Development Select Committee, in which role she focused particularly on improving the lot of marginalised societies and groups, not least through ensuring aid reached those for whom it was intended.
“The UK public is very generous and kind, but they don’t want to see funding diverted into organisations at the expense of those at the front line.”
Blockchain technology and the advent of digital currencies (and associated smart contracts) offer potential to ensure that funds are received directly and only by the ‘right’ recipients. With pressure to reduce (or not to increase) the UK Government’s allocated international aid budget, new technologies offer the possibility of making funding stretch further, which is in everyone’s best interest. It is also a potentially secure and low-cost mechanism for families in the UK to send funds to family members overseas, particularly those in countries with less traditional financial infrastructure where transactions costs are typically high.
Narrowing the gap between intentions and actions
Evidently there has been a lot of political turmoil recently, with multiple PM and Ministerial changes, which has frustrated the rate of progress. Nonetheless, current PM Rishi Sunak was previously a proponent of these new industries and continues to promote a very positive vision for good in terms of potential benefits and economic impacts.
“It’s been a bit two steps forward, one step back, but we’re heading in the right direction.”
Momentum IS building. There’s a great deal of cross-party interaction and endeavour, and many other ‘live’ initiatives such as the Treasury Select Committee enquiry, proposed amendments to the Financial Services and Markets Bill and the ongoing activity of other committees and working groups looking at NFTs (non-fungible tokens), for example. The UK government is looking at stablecoins, working with the Bank of England and other organisations to identify use cases for a potential Central Bank Digital Currency (CBDC).
More than financial services
While most of the noise around crypto and digital assets is around financial markets and services, blockchain and other DLT technologies also present opportunities across other industry sectors, e.g. real estate and land ownership, art, media, entertainment, gaming, education (in the metaverse) and much more. It is, of course, challenging trying to keep abreast of so much innovation and inevitably some pioneering technologies (and companies) will fall along the way. But that is no different to any other technology innovation and evolution, from the invention of light bulbs onwards.
“We must stay ahead of the curve and put in place building blocks to enable the next generations to both access — and take full advantage — of these opportunities.”
To learn more, listen to our podcast series, The Gage Episode 11 — ‘How to Grow the Crypto Industry in the UK’
