Supporting cryptos is right for the economy, says Sunak
RISHI SUNAK has launched a staunch defence of cryptocurrencies in the wake of the market’s collapse, drawing parallels between the struggling digital assets and the early days of the internet.
The Chancellor shrugged off criticism to insist that championing digital assets is “the right thing for the economy” despite the crypto crash that has left many investors nursing losses.
Speaking at the British Chambers of Commerce’s annual conference, Mr Sunak said the underlying technology supporting crypto assets could be “completely revolutionary”, but admitted “we don’t exactly know” the potential uses.
Mr Sunak’s positive stance on crypto assets is in stark contrast to the more cautious approach by financial regulators and the Bank of England towards investors rushing in after a recent plunge in prices.
Under the Chancellor, the Treasury has launched plans to create a non-fungible token (NFT) and a so-called ‘Britcoin’ – the UK’S answer to Bitcoin.
However, the cryptocurrency market has collapsed in the past 12 months as recession fears have mounted and interest rates rapidly rise.
Bitcoin prices have plunged from near $50,000 (£41,100) in November to below $16,000 – a 68pc slump that has stung many ordinary investors.
“I actually get a lot of criticism for championing things like this, which actually that’s fine because I think it’s the right thing for the economy,” Mr Sunak said.
“There’s lots of opportunity there. We don’t exactly know, in the same way at the beginning of the internet, we didn’t exactly know that 10 years later we’d all be using Uber or whatever it was.
“So I’m excited about that. I want to make sure that this is a place which is welcoming of that innovation.”
The Bank of England and other regulators are deeply sceptical about the cryptocurrency market and the potential fallout from consumers piling in.
Earlier this month Andrew Bailey, the Governor of the Bank, warned that crypto investors should be “prepared to lose all your money”, arguing the digital assets “don’t have intrinsic value”.
He has also called cryptocurrencies the “front line” in criminal scams.