Why the UK will struggle to be a Crypto Hub, but could be a Web4 Hub
“A challenge to regulators, policymakers, and technologists alike”
by Timothy Coleman - 28/Feb/2023
Crypto in the UK
Digital Assets/Objects such as Crypto, are regarded as property in the UK, meaning that buys and sells need to be tracked and capital gains/losses accounted for. Thankfully, services such as recap.io (not sponsored) exist, which do a lot of the heavy lifting for you, but for startups wanting to innovate in the financial technology space, especially when it comes to payments, this adds an extra layer of complexity. Revolut have slightly avoided the issue in their Ts&Cs by stating: “Please remember that trading in cryptocurrency may give rise to tax liability”, despite offering a service allowing users to make general payments with Crypto.
Regulation
As someone who has followed Bitcoin and Crypto since 2014, it has been frustrating to see many get hurt because of: a. lack of useful regulation of companies and projects which have since gone bust: MtGOX, Cryptsy (where I lost a Bitcoin many years ago), and more recently FTX and Luna; b. unhelpful regulation being slapped on retrospectively as a bandaid/afterthought. Obviously there are jurisdictional challenges, as Crypto is a global concern, but most of the frustration is towards, not just those in the Web3 space who have seeked to avoid any type of regulation; but also towards national systems in general for not regarding financial literacy as a more important topic within the education system.
Web4 Tech Hub
Web4 is a nascent category (although has been spoken about for many years) covering Metaverse, AR, VR, Wearables, anything which falls under the ‘Immersive Web’. As there is currently less regulation/policy re the Metaverse (although conversations are happening), this opens a space to learn from the mistakes made during the emergence of Web3, and do things better during the emergence of Web4. As technologies developed during the Web3 era will be used in the Web4 space (for example DLT/Blockchain managed Digital Land in the Metaverse), maybe then, regulators/policy makers and governments will begin to understand that these technologies just provide blueprints for creating Digital Objects, and consider Crypto as money and not property.