Earlier this year, the UK’s Financial Conduct Authority (FCA) stated that cryptocurrencies have no intrinsic value. This statement sent a negative message to UK crypto investors and blockchain enthusiasts, somewhat hinting that the UK was not going to welcome the two as warmly as many may have believed.
Brexit has not helped the issue with many of London’s crypto startups facing more difficulties due to the UK’s looming split with the EU.
Examples of Crypto Outfits in the UK
The crypto market in the UK is strong compared to many areas of Europe and much stronger than the rest of the world. Only Canada, Australia, slices of Africa and Japan are holding their own in the industry compared with the UK and Switzerland in Europe.
This has given birth to many different UK and London-based crypto businesses. From the popularity of the Luno Bitcoin wallet to crypto cafes, the range of products and services is diverse. These early birds to the crypto market in the UK may now be under threat due to worries of harsher regulations after the FCA’s comments and Brexit uncertainty.
How Brexit May Worry Crypto Startups
Boris Johnson has agreed on a deal with the EU although that deal has not been passed and accepted by Parliament. That means as things stand the UK will still be leaving the EU without a deal. How the forthcoming election plays out will determine how events unfold and may not even resolve the deadlock between politicians.
If they cannot find common ground and the EU doesn’t afford any more extensions, the UK will be forced to leave without a deal and that means crypto businesses – alike other businesses – will have no easy route to the single market.
Crypto businesses basing themselves from London do so because of the ease of access to the single market and they put up with higher office space costs in the process. After a possible no-deal Brexit, many crypto startups may find staying in London untenable and may seek to move into Europe – or at least elsewhere in the UK where running costs are cheaper.
One report has already looked into the figures and suggests around 250 fintech businesses have already moved from the UK to the EU or are in the process of moving out of the UK. This number is set to rise if uncertainty continues.
The Positive Signs
There are still many reasons to be positive despite the report’s findings. After all, many of the other EU member states do not have the same attitude to crypto and blockchain that the UK has harnessed – despite those recent comments.
In Germany for instance, harsher regulations have seen big crypto names leave the country, such as BitPay. The message is that even in light of a no-deal Brexit, the grass may not be greener on the other side.