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British lawmakers have voted to postpone a crucial Brexit vote and forced Prime Minister Boris Johnson to ask the EU for an extension. News.Bitcoin.com talked to the CEO of a local crypto exchange to find out the effects a no-deal Brexit could have on the crypto industry.
Effects of No-Deal Brexit on Cryptocurrencies
On Saturday, the British parliament voted to put off a decision on Prime Minister Boris Johnson’s deal, forcing him to ask the EU for another Brexit delay. William Thomas, CEO of peer-to-peer exchange Cryptomate, explained to news.Bitcoin.com that many people are calling this deal “‘Brexit in name only’ as it still ties us in with many EU institutions, including future regulatory alignment,” adding that a no-deal Brexit is becoming even more of a possibility.
In the event of no-deal being reached by Oct. 31, Thomas said, “there will be substantial uncertainty within British and EU financial institutions.” However, in terms of whether it will create demand for bitcoin and cryptocurrency in general, “I am not so certain,” he admitted, elaborating:
I would expect to see some upward movement on BTC/GBP markets shortly after the deadline, but since the British pound is a small portion of global crypto volume it may not have a large overall effect on price as some have predicted.
“It will, however, have a positive impact within the British market, but the degree of which this will affect the global cryptocurrency markets is speculative at this time,” he opined.
Cryptomate allows British users to purchase a wide range of cryptocurrencies via instant bank transfer. The platform claims to have served 11,250 customers, filled 44,853 orders worth approximately 14.43 million British pounds (~$18.74 million).
How the UK Crypto Industry Could Be Affected
Thomas further explained to news.Bitcoin.com how the U.K. cryptocurrency industry will likely be affected in the event of a no-deal Brexit. “For larger traditional financial service industries that operate out of London, there are safeguards that will see financial services ‘passporting’ to the EU market will continue until future agreements are made,” he remarked.
However, there is nothing in place and very little guidance from the British Financial Conduct Authority (FCA) about how this should affect the crypto industry and related services. “There is a huge lack of clarity in the area,” he emphasized. Nonetheless, he shared:
It’s my personal belief that a no-deal Brexit would be a huge positive for the U.K. cryptocurrency industry in the long term, as it enables us to create our own regulatory systems without interference from the EU – who are much less friendly to the industry as a whole compared to the U.K.
For European Union customers who use British-based exchange/wallet services and vise-versa, Thomas said that a no-deal Brexit “will have very little impact” on them. “British and EU customers will still be able to use SEPA bank payments which account for most exchange deposits within Europe, so trading volume should remain unchanged,” the CEO continued, noting:
Britain will continue regulatory alignment with the EU the day after we leave (until December 2020) so there’s no reason to think there will be any major disruption to banking or money services on November 1st.
As for Cryptomate, Thomas confirmed: “We will continue to accept European Union customers who have access to UK banking and this policy will not change unless we’re told differently by the FCA.” He added that most sellers on his platform have indicated that they “will be keeping their trading funds in USDT, as opposed to GBP or EUR,” noting:
We would expect to see demand for bitcoin and others increase during November, as a no-deal is likely to see the pound weaken further against the euro (and the euro vs the dollar) as people look for safe havens outside of fiat.
How do you think Brexit will affect the crypto industry? Let us know in the comments section below.
Images courtesy of Shutterstock and the Financial Times.
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