Unless you’re living under a rock, it can’t have escaped your notice that the UK is leaving the European Union at the end of March 2019. Whether you’re a supporter of Brexit or not, there will unquestionably be a period of uncertainty – if not outright instability – with regard to imports, exports, regulation, and the markets. Hopefully, any disruption will be minimal, but it’s worth at least speculating what Brexit might mean for cryptocurrency.
Brexit means Brexit
It’s worth pointing out at the start that nobody knows what Brexit will entail. We’re in uncharted waters in terms of legislation and reality, and beyond “we will no longer be part of the European Union”, any speculation is just that.
What is definite is that feelings were – and still are – running high. The fact that Google’s primary search term post-results was to find out exactly what the EU was should indicate that a sizeable proportion of votes were cast with the heart rather than the head.
Brexit and Cryptocurrency
At the time of writing, the UK is looking at a ‘no deal’ Brexit. This means that no new trading or financial relationships have yet been established.
For digital currencies that rely on a decentralised structure, that’s an interesting position to be in. And its greatest asset right now is the transparency offered by records that can’t be copied or altered. That in itself could solve many immediate post-Brexit trade difficulties. Those who have adopted a cautious optimism about the UK’s financial future have even speculated that the UK – and London’s financial centre in particular – could have a future as a centre for businesses reliant on blockchain technology.
The capital dominates the financial services industry and is only rivalled by New York in terms of global dominance. Additionally, however much criticism the UK regulator – the Financial Conduct Authority – might attract at times, it is widely-viewed as one of the steadiest and most well-respected regulators in Europe, if not the world. That combination means that financial relationships with banks regulated in the UK attracts particular trust and kudos. And yet it’s London where the effects are likely to be felt first, and to hit hardest as international talent leaves the capital, and start-ups lose confidence in establishing their base in the UK.
It’s likely that Frankfurt will be the new home for a lot of established financial institutions, but Germany has not been historically that friendly towards blockchain companies. Luxembourg may expand upon its existing status as European regulator for the likes of PayPal by establishing itself as the new home of financial innovation, but again, this is all just speculation.
As we always say when there’s a wobble in cryptocurrency world, make sure you have your keys. If you’re reliant upon your cryptocurrency as an investment portfolio, you might want to take financial advice on what to do, at least in the short-term.
However, digital currencies could end up being the safe haven for investors – the gold of the future, if you like – not to mention still providing instant and free payments between the UK and Europe.