The UK Opportunity

By understanding UK finance, you can understand the whole history of finance. It’s like a small representation of the whole world.

 Until 2008 UK was the world’s leading financial center. Its stock exchange is the oldest and one of the most important. 70% of bond trading and more than half of equity trading goes through the UK. 

Just one more data, $3.6 trillion of daily foreign exchange trades are transacted in London, its more than New York, Singapore, Hong Kong and Tokyo markets combined.

The London City is one of the most important centers of the financial system.

It has a legislative regulation that provides stability and security, with a relatively low tax regime and a significant workforce. It has 255 foreign banks (twice as many as New York) and although Brexit (2020) decimated 7,500 professionals and numerous companies, it remains an important place to understand the big financial movements.

After a monumental disaster by Liz Truss and a farce economic policy that reminds me the end of an episode of Benny Hill.

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It seems that the new English PM, Rishi Sunak, the first of Indian origin understands crypto.

Sunak is the youngest PM in history, maybe that’s why he understands what’s going on a little better than other leaders. Here we see him pushing heavily to introduce CBDC:

Following the announcement of Sunak’s appointment, Adam Jackson, director of policy at Innovate Finance, a U.K. tech industry body that also advocates for crypto, called the former finance minister a “champion of fintech.”

UK is in a remarkable 17th position in the ranking of crypto adoption worldwide:

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Together with the US, the only two advanced economies that appear in this ranking.

The history of the UK is also the history of finance. From Black Wednesday, September 16 of 1992, when the British Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM) after suffering a voracious attack from the markets (with Soros in the lead), until the financial crisis of 2008 where the photos were taken in New York, but the British Government rescued the bank with a $850 billion plan (October 2008) to save Abbey, Barclays, HBOS, HSBC, Lloyds TSB, among others.

Since then, numerous Fintechs have settled in this key square. And that is why the position of the new younger PM is especially relevant. He understands the importance of the City for the UK, he understands the historical opportunity of the technological paradigm shift, and he understands that if he does not lead the change, the change will pass him by.

Nowadays, UK is Europe’s biggest DeFi district:

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Although Brexit severely damaged this position and many companies went to Germany, which has a higher growth rate year-on-year:

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As Chancellor of the Exchequer under Boris Johnson, Sunak worked to make the UK a crypto centre. He pushed for the Financial Services and Markets Bill which, if passed, could give financial institutions stability and a strategic position in the cryptocurrency industry, accepting payments on stablecoins for example. We also saw that the national coin producer, the Royal Mint, was tasked with creating a collection of non-fungible tokens (NFTs), which has not yet been launched. This is a clear letter of intent.

 We will follow his next steps closely. The London Stock Exchange has had a motto since 1923, when there were no technological systems at all and offers to buy and sell were shouted, which is Dictum Meum Pactum meaning: “My word is my Bond.” We will see if Sunak keeps his word and transforms the City once again into an international financial centre and creates a healthy environment for DeFi institutions.

Yours in crypto