As Brexit approaches, blockchain startups in the UK are worried about the future of their projects as the politicians attempt to come our with an agreement.
This is because the companies might lose their access to the European market, which is going to affect the startups’ operations largely, and as a result, they are exploring different avenues.
A Quick Recap
The whole scene started when the UK held a referendum in 2016 to determine if it should stay in the European Union. Most of the voters opted to leave the economic block, thus triggering Brexit. Since then, the UK has been in talks with Europe regarding the economic and political agreements, but the recent hurdles have led to a situation of ‘no-deal Brexit’ which could lead to uncertainty and turbulence.
It is this uncertainty that has caused a great deal of worry for various blockchain startups as they are not sure about their future and if they will be able to expand into Europe without any issues.
Worries and Concerns
According to the CEO and founder of Solidi Ltd, Jamie McNaught, “Brexit is a hindrance to everything in the short term because all the FinTech regulation experts and lawyers are busy with so many things at the moment. They wouldn’t be busy if the Brexit hadn’t happened. Just getting time with people is difficult at this moment. Will it (Brexit) be a hindrance in the mind-and-long term? That really depends on how successful Brexit will be.”
Solidi is one of the four blockchain-based startups which were accepted by FCA (Financial Conduct Authority) for a sandbox test lasting for six months in December 2017. The startup was still going through the testing phase in July, however, the recent uncertainty has brought things to a halt.
The CEO of another startup, Etherisic, Renat Khasanshyn, is also concerned. The startup allows the providers to build their own insurance products on their open-source infrastructure. However, this could become difficult with Brexit as cross-border testing seems unfeasible and this could hike the costs as well.
He expressed the concerns stating, “The users of our protocol will be impacted by Brexit negatively because they will need to comply with regulations in the U.K. and the EU, which will likely go in different directions. And they will comply and pay for this compliance twice.”
Not all people believe that Brexit would leave a negative impact. An attorney at a UK-based firm, Richard Cohen, believes that Brexit would be positive for the country and would have little effect on the blockchain startups.
According to him, “The U.K. will be allowed to come up with a regulatory framework that is much more favorable to FinTech companies and become a friendly jurisdiction in which banks can make the best use of blockchain and global opportunities.”
Similarly, Alastair Johnson, who is the CEO of a payment ID and e-commerce platform, also believes that the UK would support the FinTech startups and technology and would help in continuing growth.
In the end, the real picture would be clear only when the final decision comes out, and we hope that it all turns to be positive and encouraging for the blockchain industry as a whole.