HM Treasury’s UK fintech review calls for new crypto-assets regime

Quick Take

  • The review said the UK should be “as broad in ambition as MiCA”, the EU’s recently-proposed crypto rules
  • It also called for the creation of a £1bn fintech growth fund to help support local startups

An HM Treasury-ordered review of UK fintech has called for the introduction of a new UK regime for the regulation of crypto-assets.

Recent moves by UK regulators – including a ban on the sale of crypto derivatives and a somewhat botched anti-money laundering register – have led some to suggest that local crypto startups will look to move to friendlier jurisdictions.

The review, announced in chancellor Rishi Sunak’s debut budget back in March 2020 and spearheaded by former Worldpay boss Ron Kalifa, points out that other markets are pressing ahead with the development of crypto-specific frameworks, such as the EU’s Markets in Crypto-Assets proposals – and states that the UK needs to move fast to maintain its position as a hub for digital assets.

The report states:

“The UK should aim to be at least as broad in ambition as MiCA – but should also consider whether it can develop a bespoke regime that is more innovation-driven.

“A bespoke regime for cryptoassets should adopt a functional and technology-neutral approach, in line with the principles of the current regulatory framework, as well as the concept of “same risk, same regulation”, while being tailored to the risks arising from cryptoasset-related activities. It should also be flexible enough to deal with future challenges – such as how Decentralised Finance (DeFi) should be regulated.”

The Treasury published a consultation paper and call for evidence on the UK’s regulatory approach to crypto and stablecoins in January.

The review also called for the UK to continue to participate in the Global Financial Innovation Network – a working group of national regulators – and to lead the way on crypto policy and regulation. The government should keep the initiatives of other international markets “under review” so as not to fall behind, it added. 


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The long-anticipated Kalifa review is an effort to help the UK maintain its position as a leading hub for fintech businesses – something of an obsession among British politicians.

It is comprised of five key workstreams, which are policy and regulation; skills; investment; international connectivity; and national connectivity.

Calls for the creation of a £1bn growth fund had already grabbed headlines when they leaked in January.

“This would be a market-led, specialist £1bn Fintech Growth Fund. It would be funded by holders of domestic institutional capital and, where feasible, utilise existing regulatory concessions made applicable only to the fund, thus providing a vehicle to support growth from Series B to pre-IPO stage and the option to hold beyond,” the report stated.  

The review also called for changes to UK listing rules through the reduction of free float requirements (the proportion of shares startups have to make available for investment when they go public), the introduction of dual class shares, and the relaxation of pre-emption rights.

These recommendations come amid fears of a mass exodus of the UK’s promising pipeline of potential fintech IPOs to the US.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.


About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.