Conservative MP and former health secretary Matt Hancock has doubled down on his support for crypto and the “liberal regulation” of it despite the global market crash that has sent the price of Bitcoin and other cryptocurrencies tumbling.
In an interview with UKTN, Hancock said his confidence in crypto has not been shaken by the major market downturn that has wiped more than $2tn in value from the sector’s November 2021 peak.
“The underlying technology is so powerful,” Hancock told UKTN. “Just because the Dotcom bubble crashed in 2001, we didn’t discredit the internet as a technology.”
Since resigning as health secretary after breaching Covid social distancing guidelines and stepping back from the front benches, Hancock has been a vocal advocate for financial technology in the UK – particularly when it comes to crypto.
The former digital secretary has even revamped his wardrobe, with his pairing of a black turtleneck and blue jeans drawing comparisons with the late Steve Jobs. Hancock brushes this off as coincidental.
“I just put on the clothes I want to wear in the morning, I don’t think about it more than that,” Hancock said. “But I’m grateful for all the interest and tips on social media.”
But there is nothing serendipitous about Hancock’s support of blockchain and its associated technologies.
In recent months the politician has appeared at the London Crypto Club to claim that cryptocurrency could “make financial systems more transparent and reduce crime”. He has declared on the City A.M podcast that it’s his “mission” to make the British public love digital assets.
“No country can stop this revolution; we can only choose whether it happens on our shores or happens to us from elsewhere,” Hancock told UKTN.
The Conservative and Crypto Party
Among the Conservative Party, Hancock isn’t alone in his support of crypto.
Earlier this year Rishi Sunak, the chancellor of the exchequer, unveiled plans to legislate stablecoins into the UK economy, make the UK a “global cryptoasset hub” and for the Royal Mint to create an NFT.
It has since been reported that a significant donation was made to the Conservative Party by a crypto lobbyist two months before the chancellor’s announcement. The party has denied any link between the donation and the government’s endorsement of cryptoassets.
Stablecoins are a type of cryptoasset that has a value pegged to something else, often a fiat currency. This made them appear more reliable than speculative tokens.
However, the implosion of stablecoin Luna earlier this year has undermined trust in the technology, sending shockwaves through the wider crypto market.
Despite this, Hancock insists that stablecoins could still effectively be implemented in the UK.
“The crash of Luna and the pressure on other stablecoins serves as a reminder that cryptocurrencies are still currencies and the age-old rules of finance still apply,” he said.
Hancock said that as long as the right stablecoins can be picked, there will be less risk, and Luna can serve as an example of the “maturing of the market”.
Hancock slams ‘patronising’ regulators
While the turbulent cryptocurrency market doesn’t concern Hancock, he is less favourable when it comes to financial regulators that he perceives to be overstepping the mark.
“I hate the patronising idea of regulators telling people what they can and can’t do with their money,” Hancock said.
“The job of the regulators is to make sure there is high-quality information and that the market functions effectively. What remit does the state have to tell them what they can and can’t invest in? I think that’s incredibly patronising.”
It comes as the Financial Conduct Authority (FCA) has taken an increasingly harsh line on cryptocurrencies that appears to be at odds with the government’s goal of encouraging cryptocurrency firms to do business in the UK.
The financial regulator has frequently warned the public of the risks associated with crypto investments. In March, the FCA created a deadline for cryptocurrency companies to register or cease UK operations.
And FCA chair Charles Randell recently gave a speech questioning the financial logic of investing in “speculative tokens”.
Hancock remains in favour of the idea of regulating cryptocurrencies but has said it should be “liberal” regulations that allow the industry to thrive.
The MP also said that the current economic hardships British people are facing amid the cost-of-living crisis should not stop crypto investments from advancing.
“Of course, there’s pressure on the cost of living, but some people have investments that they want to make, and others don’t, that’s always been the case,” Hancock said.
Hancock, however, said he has not invested any of his own money into crypto because he wants to be able to “talk freely about it” without it being perceived as a conflict of interest.