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Lord Mayor of London: The City should 'embrace' crypto

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The Lord Mayor of the City of London, Peter Estlin, boards his ceremonial coach. Photo: John Stillwell/PA

The Lord Mayor of London believes the UK should embrace cryptocurrency and related technologies to help power future economic growth.

“Fundamentally, it’s a nascent technology,” Peter Estlin told Yahoo Finance UK in a recent interview. “It’s got some bad raps associated with things like bitcoin. But there is a fundamental value in that innovation — blockchains etc.

“I think we need to embrace it, I think we are embracing it but perhaps with a degree of caution, ensuring we understand it.”

The Lord Mayor’s comments come amid growing scrutiny of crypto businesses in the UK. The government said in December that it would consult this year on whether to introduce new regulation for cryptocurrency businesses. The Financial Conduct Authority has also been investigating at least 50 UK crypto businesses.

READ MORE: Europe’s banking watchdog says EU laws on crypto may be needed

The Lord Mayor told Yahoo Finance UK: “As technology advances, we can either shape it, or let it shape us. And I prefer to be in the former category. So that’s the focus: how do we shape it so that we’re shaping it for good purposes and including defensive mechanism for those trying to do it damage?”

Cryptocurrencies were first popularised with the creation of bitcoin in 2009. Bitcoin spawned a whole host of copy-cat cryptocurrencies that exploded in popularity in 2017 before a price crash in 2018. However, many tech investors and analysts still believe that the technology that underpins crypto — blockchain — may have promise.

Blockchain is a form of shared database that has the potential to bring greater transparency and reduce the number of intermediaries needed in transactions and processes. The technology could have particularly transformative effects in things like supply chain finance and tracking the source of food and goods.

READ MORE: Crypto projects promise decentralisation — the data shows that’s far from true

Estlin said: “I do think it has a role to play. Exactly how it will manifest itself is still under development and we’ll see more over the next few years. I for one will be championing how we shape that so that we all get the benefit of it.”

The Lord Mayor of London heads the City of London corporation, which runs London’s central financial district. The Lord Mayor’s main role is to promote the city as a hub for business. Lord Mayors are elected by the City’s historic guilds and the post is a year-long term. The office is distinct from the Mayor of London.

Estlin’s agenda for this year is promoting digital skills and digital growth in the city. “The nature of services is changing and it will continue to digitise,” he said.

The Lord Mayor said Britain was well-positioned to capitalise on this shift, and highlighted the success of fintech in London as an example.

“Look at Revolut or Monzo,” he said. “If one wants to put a flavour around where is the strength of the UK in the 21st century, as we saw with insurance being the hallmark of the 17th century, the whole incubator business environment, particularly in financial and professional services, is very much where I think the UK will play well.”

The Lord Mayor said in the same interview with Yahoo Finance UK that Brexit would be a “disaster” for financial services but the UK would ultimately recover.

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Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

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