Anyone looking for a direct reference to crypto in the Queen’s Speech can be forgiven for thinking 'there is nothing to see here'.
There are references to “digital”, “finance” and even “illicit finance”, offering tantalising hints of future direction. However, we need to delve a bit deeper into a couple of statements to find nuggets hidden behind the statements.
First, consider the setting of the Queen’s Speech. It is the framework for government activities in the coming session of parliament. The substance of the speech is constrained by time limits, so any statements are the result of government departments competing for a chance to craft an entry based on ongoing activity.
Statements in the speech can be somewhat of an iceberg floating in the legislative ocean, where you see a rather small tip, but underneath there can be a huge amount of associated content.
One source of that content is the Lobby Pack for the Queen’s Speech 2022, published by the Prime Minister’s Office.
The first statement from the lobby pack we will dig into is on the financial services and markets bill, where is states: "New legislation will strengthen the UK’s financial services industry, ensuring that it continues to act in the interest of all people and communities."
From the lobby pack we find one of the main benefits of the bill would be: "Harnessing the opportunities of innovative technologies in financial services, including supporting the safe adoption of cryptocurrencies and resilient outsourcing to technology providers."
We also need to consider the fact that the Financial Conduct Authority has been working on a three-year strategy to "define the role of cryptocurrencies and assets within the UK market".
Access to and use of cryptoassets and distributed ledger technology continues to expand around the globe.
In the UK the adoption of crypto is relatively small but is growing quickly. Research shows that 4.4 per cent of UK adults (around 2.3mn people) own crypto, and regulated businesses are starting to get involved as well.
There are potential benefits for financial services who use cryptoassets and the underlying technology, and the FCA is encouraging innovation in financial services to support consumers’ interests. However, different types of cryptoassets and different types of business models bring different risks of harm for consumers and markets.
The FCA monitors the market and considers whether crypto activities fall within their remit – a sometimes complex assessment. Where they see harm, they continue to act and have the powers to do so, with the objective of supporting businesses who continue to innovate, while mitigating the risks of consumer harm.
The recent FCA CryptoSprint event saw the assembly of innovators, academics, regulators, technologists and subject matter experts to help inform future policy decisions in a safe and inclusive way.