31st October 2023 > > The UK & BTC white paper.

tl;dr

The UK proves again its world-class status of being a laggard. Today is the 15-year anniversary of the BTC white paper.

Market Snap

Market Wrap

A week now of quietly trading about $34k makes BTC once again one of the least volatile assets in a highly volatile world.

Crypto related social media is awash with a video of Gary Gensler criticising the SEC before he became its head, for not approving a spot BTC ETF. Oops.

https://twitter.com/zackvoell/status/1718387461263360032

Curious Cryptos’ Commentary – The UK

Finally the UK publishes proposals for the (partial) regulation of the crypto industry:

https://assets.publishing.service.gov.uk/media/653a82b7e6c968000daa9bdd/Update_on_Plans_for_Regulation_of_Fiat-backed_Stablecoins_13.10.23_FINAL.pdf

The introduction reads:

“The government has provided an update on its legislative approach for bringing fiat-backed stablecoins into the UK’s regulatory perimeter for financial services.”

The consultation for the regulation of cryptos started in January 2021, an extraordinary 34 months ago. This is the first concrete outcome and covers only fiat-backed stablecoins. It must be all that working from home malarkey.

The key element is section 3.10 (the CCC team reads all these documents, so you don’t have to, however dull they may be):

“HMT intends to ensure that the FCA (and, if considered appropriate, the Bank) has the power to require that the backing assets of fiat-backed stablecoins are held in a statutory trust. This will enable the FCA and Bank to make rules on requiring the stablecoin issuer (or any other firm safeguarding the backing assets) to hold backing assets for the benefit of customers.”

This is so obviously necessary it brooks no dissent.

…

I know “Politician lies again” is hardly ground-breaking news, but Rishi Sunak, when Chancellor of the Exchequer, stretched all bounds of credibility over 18 months ago on April 4th, 2022, when he made this claim:

“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.”

I wonder if he or any of his colleagues have yet noticed the stream of tax dollars heading Ireland’s way, and, if they have noticed, do they have any inkling why that might be? Nope, I thought not.

Treasury Minister Andrew Griffith (days in the office in the last month reported in single digits I hear) has made the surprising announcement that future crypto regulation will not extend to cryptos that are already regulated. What he means by that is anyone’s guess. He might have just made it up on the spot. He also carved out NFTs saying that they “should not be subject to financial services regulation.” We should expect a screeching U-turn on that point very soon.

Policymaking on the hoof never works out well. I politely suggest he looks at the EU’s world-leading MiCA (Markets in Crypto Assets) regulation and learns how to copy and paste.

Curious Cryptos’ Commentary – BTC white paper

15 years ago today, Satoshi Nakamoto published the BTC white paper:

https://bitcoin.org/bitcoin.pdf

I wasn’t until January 2009 that the genesis block was created with embedded text lambasting the actions of politicians and central banks, which remains a core component of BTC’s proposition:

“The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

It wasn’t until 14th May 2016 when I made my first BTC purchase – a total of 0.1 BTC for less than £33. I remain annoyed to this day that I was merely educating myself out of curiosity rather than considering it as a real investment. Just how wrong can one be?