Effects Of Brexit On Bitcoin And Blockchain Industries Of Europe
Everyone in Europe around the time of June 2016 experienced a tensed atmosphere, with the dilemma of “Brexit”. Now, post the Brexit decision, its consequences on the Bitcoin and blockchain industries is analyzed.
Global finances are as much dependent on London as on the Wall Street. This has been made possible by the constant and focused determination of the United Kingdom’s banking regulator, the FCA (Financial Conduct Authority). FCA is considered to be one of the most influential and successful financial regulators in Europe.
Blockchains which have good relationship with UK regulated banks, have the advantage of gaining trust of companies to build private blockchain technology or regarding applications to the top of public blockchains. This trust-building is also advantageous when it comes to working with the bitcoin blockchain. Securing the consent of the U.K.’s regulatory agency would help eliminate all the FUD and bad press issues, associated with the bitcoin blockchain technology.
UK had an advantage over USA, in terms of the norms laid to procure a financial services license. When part of the E.U., when getting a license for financial services in one country, one can passport this license to the other countries as well. This saves a lot of money and time from applying for bonds in each individual country and going through their slow process of application. U.S.A on the other hand mandates license procurement in each of its states, with the exception of Montana.
Now that Brexit is a reality, this scenario will change. UK may have to forgo the passportability of their licenses, which is crucial for startups in the Bitcoin and blockchain industries, when thinking of headquartering in Europe. Talent acquisition is another problem that Bitcoin industries will face post Brexit.
Brexit also does has some pros for the Bitcoin industry. In 2013, when the Cyprus banking crisis happened, Bitcoin had become a refuge asset. Again in the present Brexit scenario, interest in Bitcoin is seen to be rising, already having crossed the ten billion dollar market capitalization threshold. A similar rise was also noted in daily liquidity.
Blockchain becomes helpful when it comes to the payment barriers issues with E.U.’s SEPA, which might come up post Brexit. Normal banking operations may see a setback but public blockchains would be able to make instant and free settlement across the U.K.’s Faster Payments system and the E.U.’s SEPA. This industry will help stabilize the turbulence of Brexit.