The United Kingdom is exiting from the European Union, which is termed as Brexit. After the separation from the European Union, the UK will have so many things to execute for establishing the economy. In the process of doing so, the UK may have to bear huge economic as well as opportunity loss for a certain period of time without any economic boosting majors. It will impact adversely on the financial market as well, in which circumstances, cryptocurrency may play an important role. Currently, the UK’s currency i.e., Pound Sterling is powered by European Union, and after Brexit, Pound Sterling will be fundamentally weak. The prediction for the UK economy is at high risk of recession, with Brexit hurtful to the country’s vivacious financial services industry.
Relation of Cryptocurrency to Brexit:
As per the data published by Stastista in 2017, 68% of the user of cryptocurrency in the European Union are from the United Kingdom, which means that the UK is numerically dominant when it comes about using cryptocurrency among its European Union counterparts. In the year 2014, alternative finance market for the United Kingdom was 25.7%. Additionally, 5,690 ATMs for Bitcoin have been installed worldwide, 4th rank being the United Kingdom after the United States, Canada, and Austria. Cryptocurrency is directly or indirectly related to Britain and the whole of the European Union, and if anything happens in the financial sector in these economies then, it will impact the whole digital assets market as well. There are good undisclosed numbers of investors in the United Kingdom who have their weight in the cryptocurrency market, which includes keeping ICOs, Bitcoins, Altcoins, and Mining. This has been seen in time, and again that plentiful companies are incorporating the blockchain technology, and numbers are adding day by day in the territory of the United Kingdom.
Current Legal situation:
In 2018, Bank of England Governor, Mr. Mark Carney has told that the Financial Conduct Authority (FCA) is working with the Bank of England (BOE) and the UK Treasury to find a strategy for dealing with cryptocurrency risks especially on AML/CFT and financial stability. The FCA will reveal new cryptocurrency guidelines in coming future. Under the umbrella of the Cryptoasset Task Force (CTF), financial authority is trying to access the blockchain, risk associated with crypto assets, and potential benefits of cryptocurrency with respect to regulation in the UK. Cryptocurrency is not legal tender till now however cryptocurrency gain or loss is subjected to capital gain tax under the Her Majesty's Revenue and Customs (HMRC) which is a tax-collecting legal department by Government of UK and cryptocurrency exchange can be registered legally under the guidelines of Financial Conduct Authority (FCA).
Cryptocurrency after Brexit:
There might be three consequences for the values of cryptocurrency after Brexit, which are no impact, negative or positive impact, and any of these depending upon the new policy adopted by the Government of United Kingdom. As per Mr. Nigel Green, CEO of DeVere Group, Britain’s financial services sector contributes approximately 6.5% of the total GDP of the United Kingdom. If steps are taken for reforming financial sectors then, possibly cryptocurrency will be their concern in overall reformation. As we know that many countries are in progress for recognizing cryptocurrency, and many countries have already done it.
There are chances of huge economic loss for the United Kingdom after Brexit, and the UK will be thinking of getting back the economy on track. So, there will be chances to worth the cryptocurrency possibly in the long run. We have already observed the devaluation of Pound with the pronouncement of Brexit.
As per the above information, it is a good chance for the United Kingdom to allow the country to accomplish huge development in financial sectors than other nations by giving rooms for cryptocurrency, and it will surely help to boost the economy, which would have been scratched by Brexit. If the UK can make its nation cryptocurrency-friendly, then it will have a huge constructive impact to restore the economy faster, as in the case of Switzerland and Japan. This is also found that if Blockchain technology could reduce the bank’s infrastructure cost by approximately15 to 20 billion dollars per year, therefore, it might be a good choice in this regard in upcoming days. However, in the current situation, it would be early to predict anything accurately.