Matt Hancock hasn’t always backed the right horse – but he has no regrets about his support for crypto in spite of the recent market downturn, the British lawmaker told CoinDesk.
Hancock – who served as health minister during the COVID-19 pandemic during the Boris Johnson administration until he was caught in a lockdown-busting embrace with a female aide – swiveled to crypto advocacy around the beginning of this year.
A backbench member of Parliament from the ruling Conservative Party, Hancock is now one of the most high-profile crypto lobbyists in British politics – with an insight into the government’s thinking as it steers through crucial digital asset laws.
Hancock supported pro-crypto Finance Minister Rishi Sunak over eventual winner Liz Truss in the recent Conservative Party leadership contest. Hancock attempted to replace Theresa May as prime minister back in 2019, but pulled out of the contest that Johnson eventually won.
Despite 2022’s hiccups in crypto markets, Hancock, still a lawmaker, is no less convinced by the power of digital assets to improve financial services.
“There are endless killer applications that are coming into focus right now,” he told CoinDesk in an online interview – though he concedes that digital asset markets are more mature than the wider Web3 ecosystem.
“This is a massive revolution that's going to disrupt finance, in the same way that the digital revolution has disrupted music and retail and media – and nobody was explaining it,” he said.
Turmoil this year, including a fall in the price of major assets including bitcoin (BTC) and ether (ETH), and the implosion of algorithmic stablecoin terraUSD, have only made crypto easier to lobby for, he said.
“My takeout from the market noise of the last six months or so is that the fundamentals are strong,” Hancock said. “This isn't about bitcoin. This is about a disruption much deeper … giving people more control over how they manage their affairs.”
“When the market is going up, heads are turned by the easy returns,” he said. “There's a much more substantial case to be made when the market is tricky … it isn't just a ‘get-rich-quick’ scheme.”
Chief among people to influence is Kwasi Kwarteng, named finance minister by Truss on Sept. 6. Hancock admits Kwarteng has a lot on his plate; unfunded tax cuts the minister announced on Sept. 23 sent gilt and foreign exchange markets into a tailspin.
But with the new government focused on boosting growth, Hancock said he “fully expects” crypto to be the centerpiece of financial service reforms.
Kwarteng was “very, very positive” about crypto at a recent private meeting, Hancock said. “He gets the point of the disruptive power of digital assets and, crucially, that the U.K. has to be a natural home … I couldn't have been more pleased with the direction of travel.”
“There's nothing like a bit of Anglo-French rivalry to get British politicians on side,” Hancock said. “What's the point in Brexit if we're not going to make ourselves a more attractive regime than our continental neighbors?”
It’s been a turbulent few months in British politics. Mass resignations from Boris Johnson’s government in July were followed by a leadership contest to replace him, and then by the death of Queen Elizabeth – all leaving little time for policy tinkering. The industry is crying out for the government to act.
“A lot of the stuff that is set in train does need to be finalized,” said Andrew Whitworth, a policy director for crypto company Ripple who’s based in London, during an online interview. “We can't just trickle on, we do need this clarity.”
Whitworth took comfort from pro-crypto remarks from financial minister Richard Fuller made after Truss took office, but is still hoping for higher profile support from the government in the coming months.
Hancock himself certainly has a few ideas for what changes need to happen – and isn’t satisfied with existing legislative plans initiated by Sunak back in April.
“The Financial Services and Markets Bill that's in front of Parliament now is, in my view, essentially a placeholder, it shows intent,” Hancock said – warning that he will get involved if the government itself doesn’t intervene in the coming weeks to, as he puts it, get the details right.
Hancock wants to switch the burden of proof so that “the regulator has to show that there's a problem,” rather than the current situation where startups must seek “permission” from the Financial Conduct Authority before they can even get going.
“I want people to be able to build, and only get involved with the regulator when [or] if there's a genuine problem,” he said.
Alongside changing the FCA’s “demeanor,” Hancock wants to see clarity on how existing rules apply to crypto, tax tweaks and a more favorable capital treatment for crypto to encourage traditional finance players in.
Achieving Hancock’s goal, and Whitworth’s, would rely on a calming of recent political turbulence. Though in principle the next election won’t be called before 2025, current polls seem to suggest a landslide for the opposition Labour Party – from which, Hancock says, there is less crypto enthusiasm.
“I don't think it [crypto] is particularly party political,” he said, “But I do think there are more people who get this on our side of the fence … the center-right of politics looks more for freedom.”
A spokesperson for the Labour Party did not respond to CoinDesk’s request for comment on Hancock’s remarks – but the evidence does seem to be that, indeed, the center-left opposition grouping is more crypto-skeptic.
“Many are rightly questioning whether crypto has a future at all,” Labour Party Treasury spokesperson Abena Oppong-Asare said during a Sept. 7 parliamentary debate, adding that the country had become a “center for illicit crypto activity” and that Russian oligarchs had used crypto to avoid western sanctions.
“A Labour government would be serious about attracting fintech companies to the U.K. and safely harnessing the progressive potential of blockchain technology,” Oppong-Asare said. “To do that properly, we need thorough and thoughtful regulation of the sector.”
There’s an app for that
Crypto isn’t Hancock’s first foray into online innovation: As minister responsible for digital policy back in 2018, he released his own social media app, named after himself. Intended to prove online discourse can be civil, he still seems rather proud of it.
“It became a really friendly, if slightly self-mocking, place... I'm fully aware of the many memes that it's sparked,” he said. “I post on it pretty regularly, about constituency stuff, generally.”
You can still download Matt Hancock from the Appstore, and recent posts on local issues such as hospital expansions and canceled bus routes have attracted a couple of likes each. Will there be a Web3 version, CoinDesk asked?
“No,” he said. “The technology's not mature enough yet.”
UPDATE (Oct. 13, 2022, 10:16 UTC): Amends reference to leadership contest; extends quote regarding app.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.