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- 1 Policy Exchange notes Web3 is a new technology and requires updated regulations.
- 2 Unlike Web2, the current internet, Web3 enables users to control their data.
The United Kingdom (UK) Prime Minister Rishi Sunak sees the future of Britain as a global crypto hub. However, with limited global adoption, that will not be an easy feat. Policy Exchange, a British think tank, has some proposals for the country for improvement in Web3 technology.
UK Could Capture A Larger Crypto Market
Study notes the country may have an upper hand to the United States regarding crypto regulations. A balanced and tailored approach could help the UK to capture a larger crypto market. The paper notes the UK holds a strong reputation as a global financial center. It renders an attractive opportunity for Web3 enthusiasts.
Cryptocurrency users in the UK exchanged $233 Billion in value last year. The failing crypto regulatory landscape in the US, as the study notes, may lead to relocation of businesses abroad. What’s more, 12 percent of crypto hedge funds are considering relocating citing regulatory concerns. Conjointly, they make up to $138 Billion worth of crypto market.
Additionally, Policy Exchange also notes Web3 is a new technology and requires updated regulations. The author of the report writes, “An effective regime needs to balance innovation and consumer protections.” Additionally, Web3 also poses risks due to its altered working.
Unlike Web2, the current internet, Web3 enables users to control their data. Self hosted wallets can safeguard people from data collection by third parties. Additionally, there’s no evidence these wallets pose heightened risks in illicit finance. The document cites a UK Treasury report where the Financial Action Task Force (FATF), an intergovernmental panel, was not able to “identify them as categorically high risk.”
As crypto plays a pivotal role in the Web3 sector, the report also addresses environmental concerns. Proof-of-work (PoW) cryptocurrencies are considered contributors to rising carbon in the air due to their energy intensive process. Nevertheless, it raises a question “whether the environmental cost of mining cryptocurrency is worth the benefits it provides?”
“Digital Fellows” May Act in Advisory Capacity
Study’s final proposal recommends recruiting “Digital Fellows” to assist the government in upgrading public services with such technologies. Moreover, Policy Exchange writes “Web3 has the potential to revolutionize various aspects of public services. The technology has the ability to bring in a higher level of transparency and security.”
Digital fellows can serve in advisory capacity to the government. They may identify how public services can benefit from the state-of-art technologies. Policy Exchange advises “They should be oriented towards major public services like the Passport Office, HMRC, the Student Loans Company, Companies House, The Insolvency Service, the Land Registry, and other similar parts of government.”
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
