U.K. set to accelerate crypto sector and become web3 innovation hub

The current financial system is built on users entrusting their money to banks and other intermediaries. Access to money shouldn’t be dictated by ‘business hours’ or the time it takes for a check to clear. However, this is one of the main problems cryptocurrency aims at solving: giving users more financial flexibility. Coinbase is boosting crypto mass adoption by traveling the world to see how crypto creates economic freedom and solves real problems.

One region trying to “turbocharge” its crypto sector and become an “innovation hub for the Web3 economy” is the United Kingdom. Coinbase recently discussed its increasing focus on the U.K. and the European Union as these regions prepare for a significant shift in their digital economy landscape.

U.K. ready to embrace crypto sector and serve as web3 innovation hub

After Coinbase CEO Brian Armstrong met with Andrew Griffith, UK’s Economic Secretary, and City Minister, Coinbase published a blog post titled “The U.K. as a Web3 innovation hub”.   In the blog post, Coinbase revealed that the U.K. has become one of its fastest-growing user markets, and the E.U. is set to adopt the Markets in Crypto Assets (MiCA) regulation, introducing a new licensing regime across its 27 member states.

Coinbase CEO Brian Armstrong will headline U.K. Fintech Week on April 18, discussing the company’s commitment to the region. The demand for crypto is steadily increasing, with 22% of U.K. adults owning cryptocurrency and 28% likely to trade or buy crypto within the next 12 months. Furthermore, 84% of U.K. adults believe the global financial system unfairly favors powerful interests, while 65% think the system requires major changes or a complete overhaul.

Armstrong’s nine recommendations for the U.K. government were also outlined in the post. These include fostering collaboration between the banking and FinTech sectors, developing a cross-departmental strategy for tech innovation and economy digitization, and promptly establishing a regulatory framework for crypto, clarifying tax treatment for crypto assets, and creating a plan to implement decentralized I.D. (DiD).

The U.K. has been actively exploring and developing a framework for digital assets, including CBDCs and other cryptocurrencies. Recently, Bank of England Governor Andrew Bailey expressed his belief that these assets will likely play a crucial role in the future monetary system.

Coinbase has also previously praised developments in the U.K., particularly when considering its new offshore trading firm headquarters location.

Coinbase warns the United States may lose its innovative edge

At the first-ever hearing of the Subcommittee for Digital Assets, Coinbase’s Chief Legal Officer Paul Grewal warned that the overzealous approach adopted by regulators might cause the U.S. to miss out on its competitive advantage.

This sentiment has been echoed time and again by American figures in government, as well as industry players. Representative Tom Emmer notably called out the SEC for its “shakedown authority” regarding cryptocurrencies, and Commissioner Hester Peirce cautioned that regulatory actions are driving away innovation rather than promoting it. These words of caution have only been amplified after Bittrex was hit with SEC’s enforcement action on Monday.

The cryptocurrency exchange took the opportunity to point out that overregulation may force companies to relocate outside of the U.S., a fate that has already befallen some major startups such as Crypto.com and Nexo.