Rishi Sunak is now U.K.’s Prime Minister after an audience with King Charles III at Buckingham Palace, who invited him to form a government on Tuesday. The former Chancellor of the Exchequer holds positive views of blockchain, distributed ledger technologies (DLT), and cryptocurrencies. While the road ahead may be filled with uncertainties, his ascension to the highest office in the British government could drive pro-crypto policy formulations in the U.K.
The United Kingdom Gets A New Prime Minister
Former Chancellor of the Exchequer in Boris Johnson’s government and an established crypto advocate, Rishi Sunak, has replaced Liz Truss as the United Kingdom’s (UK) Prime Minister (PM).
Sunak was elected the Conservative Party leader on Monday after rival candidates Penny Mordaunt, Lord President of the Council, and Boris Johnson, the former PM, dropped out of the race. Penny Mordaunt announced that she withdrew from the race just before the 1922 committee announced. She was reportedly less than 10 M.P.s away from the required 100 MP threshold.
After campaigning hard for a comeback, Boris Johnson suddenly exited the race for the U.K. prime minister position on Sunday, saying that it was in the nation’s interest for him to withdraw from the contest, at least for now.
Sunak’s ascension to the Premiership comes after the resignation of the immediate former PM Lizz Truss on Friday, October 21, after less than 45 days in office. After assuming office, her ambitious plans to offer substantial tax breaks to the country’s highest earners quickly backfired. This was embodied in her economic “mini-budget,” which drew heavy criticism from not only the general public but also members of her cabinet.
Mortgage prices spiked following her proposed economic plans, with the sterling pound tanking deeply, reaching a 20-year low against the U.S. dollar. In the aftermath, she quickly became unpopular with most Britons.
Sunak was chosen by his fellow Conservative Party members of parliament after it emerged that he was the only candidate to receive support from more than 100 legislators. That made him the winner by default after it emerged that he was the only Tory MP eligible to run in an election.
Announcing Sunak’s win, Conservative party official Graham Brady said:
“I can confirm that we have received one valid nomination, and Rishi Sunak is therefore elected as leader of the Conservative Party.”
Sunak’s Stance On Crypto
The former Minister of Finance inherits the U.K. economy at a tumultuous time. Inflation has been rising throughout 2022, straining economies of the world. U.K.’s consumer price index (CPI) registered a 10.1% year-over-year increase in September, indicating that inflation was likely to stay high for longer. The oil crisis occasioned by the Russia-Ukraine war has aggravated the Island country’s economic problems, leading to an 80% rise in domestic energy bills at the beginning of October.
As a result, the sterling pound (GBP) continues to weaken against a strengthening United States dollar (USD, causing Brits to turn to cryptos such as Bitcoin as a hedge against inflation. It would be interesting to see if this trend continues as Rishi Sunak is a renowned crypto-bull.
Liz Truss’s only support for the crypto industry was online in 2012 when she advocated for a low-regulation approach to digital currencies. Contrastingly, Sunak’s appointment as PM may lead to the formulation of several pro-crypto policies as the ones he made during his tenure as Chancellor of the Exchequer.
For example, in April 2021, Sunak proposed that the Bank of England and H.M. Treasury work together to develop a central bank digital currency (CBDC). Note that the development of a CBDC would align with the Treasury’s aim to help fintech companies expand their operations and ensure that the U.K. remains at the forefront of digital finance. Sunak also proposed the use of DLTs for application in the private sector.
Earlier this year, Sunal affirmed his commitment to cryptocurrencies when he made public his plans “to make the U.K. a global crypto-asset hub.” At the forefront of these ambitions include recognizing stablecoins as a form of payment in the European nation while building a “financial infrastructure sandbox,” a move that would substantially boost the crypto industry.
Before venturing into politics, the new U.K. prime minister worked as a hedge fund manager at Goldman Sachs investment bank in the U.S. He was elected to parliament in 2015 and later appointed finance minister in 2020.
Sunak’s return to government as the Prime Minister makes the future of cryptocurrencies and the regulation around it in the U.K. clearer.