There are things you shouldn’t ever bring up in polite conversation: politics and religion, obviously, but also crypto, blockchain and Web3.
If you do, there’s a good chance you’ll hear predictions about the demise of fiat currencies and how there isn’t a problem whose solution isn’t sitting on the blockchain. Or you’ll meet the person who thinks it’s all just a waste of energy (literally and figuratively); that it’s a big bubble and the whole shebang is worthless – not just dogecoin, but smart contracts too.
I don’t have any unique insights on how revolutionary the technologies will or won't be. I’ve read the same articles available to any interested reader. That said, I think we should take the potential seriously. I would be nervous about betting (even if only my reputation was at stake) against the likes of Marc Andreessen, Elizabeth Stark or Vitalik Buterin without knowing a lot more.
But currently the UK government is doing just that – and it’s not just reputations on the line. At a recent roundtable we hosted, dozens of crypto and blockchain entrepreneurs spoke eloquently about how their businesses are solving very real problems. But, for many, their biggest problem is trying to build it in the UK.
We’ve hosted meetings with more or less every type of business out there, but no sector has been shunned like these entrepreneurs. Incredibly, some had actually been told by their regulator they should move their business abroad.
This negligence has shown itself in the way the Financial Conduct Authority (FCA) has been forced to extend a temporary licensing programme for cryptocurrency firms. Mel Stride MP, chair of the Treasury select committee, is asking questions: “It is disappointing to hear that the FCA hasn’t fully met its own already-extended deadline, which the committee strongly encouraged it to meet. I look forward to receiving a full explanation for the delay.”
If you speak to someone within the FCA (and I have) you would be hear about a regulator that’s overworked and under-resourced. Wherever the fault lies, the UK is haemorrhaging crypto entrepreneurs.
An entrepreneur speaks out in the FT: “I have been the biggest fan of the FCA over the years. They were the gold standard of regulation. But no longer.” Lisa Cameron MP, who is an Officer of the APPG for Entrepreneurship, recognises the problem: “The lack of clarity from the FCA has presented huge challenges to firms in terms of business certainty.”
Crypto, blockchain and Web3 (if you think that’s even a useful term) covers a lot of ground. These aren’t industries immune from fraud and regulatory complexities. And let’s be clear, some of this is indeed the Wild West – just yesterday the Vietnamese-owned Ronin Network was hacked to the tune of $600m. But we mustn’t tar all crypto with the same brush.
It also probably doesn’t make sense to conflate crypto with blockchain. If you look at Beauhurt’s list of 249 high-growth blockchain companies you’ll find some crypto companies, but also plenty doing very uncontroversial, reassuringly boring things being done in regulated industries. The government needs to be careful about the way we define our terms.
With a financial centre to rival any on earth, the UK is perfectly placed to benefit from whatever the future holds. We could also help tame the wilder elements with proportionate regulation. As The Times reported: “While UK-based businesses that do not register with the watchdog are required to stop trading, they can bypass the FCA by setting up abroad, where they can continue to offer their services to people in Britain."
We’re not just failing to attract entrepreneurs from abroad, but actively turfing out those already here.
APPG AGM
Later this month, the APPG for Entrepreneurship will hold its AGM. This is where it elects new Officers. As the Secretariat we’re coordinating all this.
You can see the current list of Officers here. These are MPs and Peers who are supportive of the APPG’s aims: to encourage, support and promote entrepreneurship, and ensure Parliament is kept up-to-date on what is needed to create and sustain the most favourable conditions for entrepreneurship.
You can help! Most obviously if you’re an MP or Peer get in touch with Katrina Sale to find out more. If not, ask any MPs or Peers you know to get involved, or even contact your local MP (find out who that is here) to suggest they should.
In addition, we’re looking to expand our APPG Advisers too. These are normally people involved in business groups like the FSB, Enterprise Nation, or CBI. Anyone who fits the bill can get in touch with me to find out more.
Finally, if you have any ideas of work we should be doing, drop me a message. While we're never short of our own, we’re always open to fresh ideas from outside.
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