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Treasury maintains cryptoasset hub ambition despite market collapse

Treasury cryptoasset
Image credit: Claudio Divizia via Shutterstock

The Treasury has reiterated its ambition to transform the UK into a global cryptoasset hub, despite the industry downturn and the aftershock of collapsed exchange FTX.

Speaking at a Financial Times banking conference, Andrew Griffith, economic secretary to the Treasury, said he still held the ambition to boost the UK’s position in the cryptoasset space.

“I’d like to reiterate that ambition”, he said, despite admitting the need to clearly communicate the associated risks with the industry.

Referring to the UK’s established success in the fintech sector, Griffith said: “I see crypto assets [and] distributed ledger technology as an evolution of the UK’s existing strength in fintech.”

However, the secretary specified that the department’s ambition for cryptoassets was largely based on “big opportunities in fiat-backed stablecoins”.

Fiat-backed stablecoins are a form of cryptocurrency that has a value pegged to a traditional currency and can be run by a central authority, such as the Bank of England.

The government’s cryptoasset ambitions were first stated by Prime Minister Rishi Sunak in April. Then serving as the chancellor, Sunak said: “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.”

Since then, the cryptoasset market has been rocked by a continuous stream of crises, most recently the collapse of FTX, one of the world’s largest cryptoasset exchanges.

Prior to the FTX situation, a crash in the value of the TerraUSD stablecoin cast doubts on the security of all forms of cryptocurrency. The Treasury responded in May to the crash, once again remaining bullish on its crypto ambitions.

Former conservative politician, former health secretary, and reality TV contestant Matt Hancock heavily endorsed the cryptocurrency space in an interview with UKTN in June.