The UK government has officially stated that it will not follow the U.S. in creating a national digital asset reserve. Emma Reynolds MP, Economic Secretary to the Treasury, clarified that the UK does not view stockpiling Bitcoin as appropriate for its market. The government, however, continues to explore other ways of integrating digital assets into its financial infrastructure.
UK Dismisses Bitcoin Reserve Plans
Speaking at the Financial Times Digital Asset Summit in London, Reynolds emphasized that while the U.S. is taking steps to build a Bitcoin reserve, the UK will not pursue the same strategy. “We don’t think that’s appropriate for our market,” Reynolds said, explaining that the UK has a distinct financial and digital asset regulation approach.
Furthermore, he acknowledged the growing role of digital currencies but confirmed that the government will not mirror the U.S. model of holding Bitcoin on the country’s balance sheet.
Strengthening UK-US Cooperation on Digital Assets
While distancing itself from the Bitcoin reserve idea, the UK government remains committed to closer cooperation with the U.S. on digital asset regulation. Reynolds pointed to recent high-level discussions between the UK Chancellor of the Exchequer and U.S. Treasury Secretary Scott Bessent. These meetings have led to the formation of a “senior official level working group between the UK and the US” focusing on digital assets and regulation.
A regulatory forum between the two nations is scheduled for June, where further details on cooperation will be discussed. This forum aligns with the UK’s goal to enhance global collaboration on digital assets while avoiding the EU’s path of creating a bespoke regulatory regime for crypto assets.
UK’s Regulatory Approach to Digital Assets
From Reynolds’s perspective, the UK would merge digital asset rulemaking with traditional financial services regulations by implementing the principle of “same risk, same regulatory approach.” According to Ms. Reynolds, the decentralized nature of crypto, especially Bitcoin, poses specific hurdles for the government regarding monitoring activities.
The UK seeks to establish a regulatory framework that optimizes digital asset innovation within stable observational parameters despite its disagreement with MiCA. According to Reynolds, Bitcoin’s decentralized nature makes some digital asset regulations challenging, while government intervention becomes less effective.
The UK’s response to the crypto market has been cautious but progressive in line with this trend. Nevertheless, the government intends to embrace blockchain in its upcoming regulatory framework. Blockchain technology will be introduced in sovereign debt issuance, ensuring that crypto assets do not destabilize the financial system.
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