The government will make it easier for UK fund managers to hold crypto assets in their portfolios.
In a speech on Monday (April 4), John Glen, economic secretary to the Treasury, told the Innovate Finance Global Summit that the government will be amending the Investment Manager Exemption to include cryptoassets.
The exemption enables non UK-residents to appoint UK based investment managers without having to pay UK tax.
The inclusion of cryptoassets in this exemption would mean that income generated from funds holding crypto would not be taxable in the UK.
“Above all, we want to position the UK as a pro-innovation jurisdiction… which is attractive to inward investment, and to firms who don’t yet have a settled base,” Glen said.
He added that never before in the history of commerce has there been an invention as “hyped and misunderstood” as blockchain, which he said will have “profound effects” across multiple domains.
"It’s a challenge… and it’s an opportunity, he said, adding that UK fintech is in a "great place".
"It’s our job, as a government, to ensure that success continues, a mission to which we are very much committed."
Glen’s speech came after a government announcement which said stablecoin is soon to be approved as a form of payment in the UK, as part of a plan to make the UK a ‘global hub’ for cryptoasset technology.
Chancellor Rishi Sunak said: “We want to see the businesses of tomorrow, and the jobs they create, here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
Daniel Gee, managing director of Pello Capital, and owner of gamings company Ludus, said crypto regulation in the future is "inevitable".
"With regulation, although a lot of people in crypto are scared of it, it will serve to actually cultivate innovation in the industry. I think it's ultimately inevitable," he said.