Can cryptocurrencies be the cure-all for Brexit? Or is it yet another far-fetched goal?

  • 09 July 2019, Tuesday, 12:00

Doesn’t it seem like we’ve been here before? Isn’t this a case of deja-vu?

Every time a financial crisis hits the world economy or an important part of it, people often categorize cryptocurrencies as a cure-all for their financial woes.

CRISIS: Brexit

Think back to the beginning of the current decade when the embers of the financial crisis were settling down, cryptocurrency proponents were marketing decentralized currency as the Holy Grail that could’ve prevented the housing collapse, or at least decreased the severity of its aftermath. Fast forward a few years later, the same is manifesting with Brexit, Britain’s long drawn-out exit from the European Union.

Brexit is a topic that has not just well and truly divided the country, but has also caused the ousting of two Prime Ministers. While the crisis has made for great headlines, it has also invited a discussion on the prospect of cryptocurrencies.

The deVere Group, a financial advisory organization, recently put out a report titled, “Cryptocurrencies should help boost Brexit Britain’s beleaguered financial services,” with the aim of detailing how decentralized currency and its upheld blockchain technology can find refuge in the United Kingdom amidst financial turmoil, depending on where the negotiations go with between London and Brussels.

Calling the claim a “bold assertion,” Nigel Green, CEO of deVere Group and author of the report, attested that this pairing is skewed.

Drawing on the coincidental nature of the path of Brexit and Bitcoin, Green stated for the first time since the June 2016 referendum, UK’s economy is “contracting,” while the king coin has given a finger to skeptics and amassed a 200 percent price rise since the year began.

Green suggested that the financial sector will be one of the worst-hit industries if a full-fledged Brexit does manifest and given London’s role in the global economy, the tremors could be felt beyond the North Sea and the English Channel. He stated,

“Companies across the industry have had to take precautionary action to safeguard their interests. There’s been a steady drain of investment, confidence, talent and activity away from UK financial services – and this is only likely to intensify in the coming months and even more so should the UK leave with no deal.”

Cryptocurrencies, in Green’s opinion, can ‘reshape,’ and ‘reinvigorate’ the financial services sector in a post-Brexit world, citing three key (far-fetched) reasons.

CONTROL: Cryptocurrencies

From a pure regulatory standpoint, Green contends that the UK can set up its “own rules and regulations,” thereby curating an “innovative, pro-business, well-regulated market,” one that is free from the European Union’s “slow and burdensome bureaucratic protocols.”

This attitude, Green adds, could align the United Kingdom with Japan and Switzerland and other crypto-friendly countries. It should be noted that countries often employ regulation that is restricted to their geographical boundaries, especially when dealing with digital assets due to their nuanced nature.

Secondly, Green heralded cryptocurrencies as the “future of money,” emphasizing on its universal, ubiquitous and digital nature. In the CEO’s opinion, the UK should place great importance on the future of this financial asset, and “be ahead of the game,” while the others lag behind, with the notion of Brexit not veered upon on this point.

Finally, Green suggested that the power of the blockchain should be “capitalized on further,” as the UK is already a “thriving global fintech and blockchain hub.”

He concluded,

“The growing cryptocurrency market has already provided tangible economic benefits to other major economies. Post-Brexit Britain will be uniquely placed to go even further and by embracing it, it could reboot the UK’s financial services sector.”

Earlier in the year, Green stated that high net-worth Brits were looking to invest in Bitcoin and Ethereum, in fear of a Jeremy Corbyn-led Labour government sweeping to power.

Speaking to Express UK in May 2019, Green stated,

“An increasing conversation we’re having with clients in this regard involves investing in cryptocurrencies, such as Bitcoin, Ethereum and XRP, in lower tax, crypto-friendly jurisdictions.”

All in all, global political and financial turmoil will render nothing but success for the cryptocurrency industry, as a recent survey suggested that 62 percent of analysts believe Brexit will only be positive for crypto prices. Over 72 percent of them are holding digital currencies in the eventuality of a UK departure.

Come what may, one thing that remains strong within the cryptocurrency world is that the prospect of a global crisis will result in a rise in price rise for digital assets.

So, sit back, relax, enjoy your English tea and biscuits, while watching the world burn.