Shaping Bitcoin's Future in UK with Freddie New SLP614
Nov 11, 2024
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Freddie New, general counsel at The Little Car and Head of Policy at Bitcoin Policy UK, dives into the evolution of Bitcoin regulation in the UK. He discusses how perceptions have shifted from viewing Bitcoin as a criminal tool to its recognition as property. Freddie highlights challenges with banking access and the FCA's restrictive measures, while advocating for clearer regulations. The conversation also touches on fostering Bitcoin adoption and exploring the future of custodianship, emphasizing the need for political engagement to support pro-Bitcoin policies.
Freddie New emphasizes the historical evolution of Bitcoin regulation in the UK, highlighting ongoing misunderstandings and barriers to adoption.
The recognition of Bitcoin as property by the Law Commission signifies a crucial advancement in solidifying its legal status within the UK.
Grassroots advocacy and engagement with politicians are vital for fostering a Bitcoin-friendly policy environment and addressing regulatory challenges.
Deep dives
Freddie New's Background and Advocacy for Bitcoin
Freddie New, with a diverse background spanning M&A law and fintech, emphasizes the uniqueness of Bitcoin in the regulatory landscape of the UK. He transitioned from law to working with startups, particularly in the electric vehicle sector and a UK fintech, where he played a pivotal role in launching Bitcoin products. Observing a lack of representation for Bitcoin in UK policy discussions, he co-founded a Bitcoin-focused advocacy group after the Edinburgh Bitcoin conference. This initiative seeks to clarify misconceptions surrounding Bitcoin versus other cryptocurrencies, aiming specifically to promote Bitcoin's importance.
The UK's Regulatory Environment for Bitcoin
The UK’s regulatory stance on Bitcoin reflects both historical struggles and evolving attitudes, with significant barriers still present. The initial government response labeled Bitcoin primarily as a tool for criminals, leading to a regulatory environment fraught with confusion and overregulation. Despite the initial skepticism, shifts in parliamentary thinking suggest a gradual recognition of Bitcoin as a legitimate asset, yet organizations like the Financial Conduct Authority (FCA) remain hesitant in their approach. Acts like the gambling report showcase the FCA's contradictory stance that allows individual ownership of Bitcoin while restricting access to related financial products.
Public Misunderstanding of Bitcoin and Central Banking Resistance
The podcast highlights a persistent misunderstanding among UK regulators and financial professionals regarding Bitcoin's value and role. Many in the financial sector struggle to accept that a decentralized, non-state asset can hold value, often causing them to overlook the significant demand and adoption Bitcoin has garnered. This cognitive dissonance leads to negative characterizations of Bitcoin that ignore its growing appeal among legitimate users and investors. The challenge remains to effectively convey this value proposition to policymakers who remain entrenched in traditional monetary paradigms.
Mining and the Use of Renewable Energy
The discussion covers the UK's critical need to bolster its Bitcoin mining industry, particularly in the context of renewable energy usage. With a significantly low share of global Bitcoin hash rate, there's potential for the UK to utilize its abundant renewable resources, notably waste energy, to foster a robust mining industry. As regulatory bodies in Europe push for energy disclosures, advocates argue for the environmental benefits and economic opportunities that a thriving mining sector could provide. This includes arguments that keeping mining operations in environmentally-friendly jurisdictions can mitigate overall carbon emissions and support energy sustainability.
Grassroots Efforts and Legislative Advocacy
Freddie New emphasizes the importance of grassroots advocacy in influencing Bitcoin policy and regulation in the UK. They plan to launch initiatives that involve distributing literature to politicians and creating templates for grassroots supporters to contact their MPs. This approach aims to educate lawmakers about Bitcoin's potential benefits and encourage positive legislative environments. Through community involvement and financial contributions, supporters can actively participate in shaping Bitcoin policy and credibility within the UK's financial ecosystem.
In this conversation, Freddie New, general counsel at The Little Car and Head of Policy at Bitcoin Policy UK, discusses the evolution of Bitcoin regulation in the UK. He highlights the historical context of regulatory attitudes, the role of the Law Commission in recognizing Bitcoin as property, and the challenges posed by the Financial Conduct Authority (FCA).
The conversation also touches on banking access issues, the impact of fraud concerns, and the future of Bitcoin custodianship. They also discuss the strategic reserve held by the UK government, regulatory challenges faced by Bitcoin exchanges, and the broader policy goals for Bitcoin advocacy. Freddie sheds light on the political landscape and the need for engagement with politicians to promote Bitcoin-friendly policies. Additionally, they address the ECB's recent criticisms of Bitcoin and contrast the regulatory approaches of the UK and EU.
Takeaways
Freddie New advocates for Bitcoin policy in the UK.
The UK has a history of misunderstanding Bitcoin.
The Law Commission has recognized Bitcoin as property.
The FCA has restricted access to Bitcoin products.
Fraud concerns impact banking access for Bitcoin users.
Bitcoin is seen as a unique form of money.
The government is becoming more positive about Bitcoin.
Banks are primarily concerned with self-preservation.
The FCA's stance is a significant barrier to adoption.
Bitcoin is for both individuals and institutions. The UK holds 61,000 Bitcoin, making it the third largest holder.
There is a need for the UK to capitalize on its Bitcoin holdings.
Self-custody of Bitcoin must remain legal in the UK.
Access to exchanges and banking services is crucial for Bitcoin adoption.
The UK should explore the potential of Bitcoin mining using renewable energy.
Political engagement is essential for Bitcoin advocacy in the UK.
The ECB's criticisms of Bitcoin are fundamentally flawed.
The UK and EU have different regulatory approaches to Bitcoin.
Pension funds are beginning to allocate assets to Bitcoin.
Support for Bitcoin Policy UK can help influence positive change.
Timestamps:
(00:00) - Intro
(01:00) - Who is Freddie New?
(03:26) - An overview of Bitcoin regulatory scenario in the UK
(08:00) - The shift in perception: From criminality to legitimacy
(17:23) - Are banking onramps/offramps to Bitcoin a hurdle in the UK?
(21:13) - AML regulations & their Implications for Bitcoin
(26:21) - Sponsors
(32:08) - The FCA's resistance to Bitcoin adoption in the UK; Strategic Bitcoin Reserve
(40:43) - Sponsors
(44:02) - Answering a questionnaire to buy Bitcoin in the UK?
(47:51) - What are the Policy Goals for Bitcoin in the UK?; Bitcoin Developer community
(53:06) - Politicians & their stance on Bitcoin advocacy
(1:06:27) - Contrasting UK & EU Regulatory approaches
