How The Brexit Is Affecting The Bitcoin And Blockchain Industries

Walking down the streets of Madrid on June 24th, 2016 during a business trip, I began to hear murmurs around every corner. I don’t speak Spanish very well, but there was one word I could make out, ‘Brexit’. This topic seemed to have been on everyone’s mind for the prior few weeks as I traveled around Europe, visiting Amsterdam, Paris and Madrid. However, on that day, the shock and awe in the voices of nearly everyone in Europe was palpable, even to foreigners who didn’t speak the language. The Brexit was, despite the campaign that led to it, entirely unexpected, and there are a lot of puzzling implications for the Bitcoin and blockchain industries.
London is to the European Union as Manhattan is to the United States. Global finance depends on ‘The City’ in the same way it depends on Wall Street. During my travels, when meeting enterprises the question that would often come up was, ‘Who are your banking partners and where are they regulated?’ London’s dominance of financial services, representing 9.6% of the United Kingdom’s GDP and with London rivaling NYC as the largest financial center in the world, has been maintained and fostered by the work of the Financial Conduct Authority or FCA, the UK’s banking regulator. This has placed the FCA as, if not the most, one of the most well respected financial regulators within Europe.
Even though blockchains present themselves as inherently trustless systems, trust is still required when working with companies building private blockchain technology or applications on top of public blockchains. Having relationships with banks regulated by the UK has a distinct advantage from a trust and pedigree standpoint, especially when talking with enterprises. This is especially true when working with the bitcoin blockchain, because of all the FUD and bad press around the technology. Obtaining the blessings of the U. K.’s regulatory agency would almost immediately dispel those concerns.

This post was published at Forbes on JUL 14, 2016 @.