Home / Markets / Cryptocurrency /  Rishi Sunak as UK prime minister: What does this mean for cryptocurrencies?

Rishi Sunak is the new Prime Minister of the United Kingdom. Sunak is now taking charge from former PM Liz Truss who resigned after 45-days in office due to heavy criticism. He emerged as the clear winner after his competitors Penny Mordaunt and former Prime Minister Boris Johnson pulled out their candidacy from the Conservative Party leadership election. Sunak's appointment as the new UK PM is taken as positive by crypto experts. Sunak is said to be a pro-crypto politician and major reforms are expected from him in the blockchain industry.

The 42-year-old investment banker-turned-politician Sunak delivered his first speech as the PM outside Downing Street. Sunak said that he is determined to "fix the mistakes" made by his predecessor Liz Truss.

While delivering his speech, Sunak said, "I am ready to lead the country into the future and put your needs above politics", adding, "I will build a government that represents the best of my party."

Sunak further said, "Work starts now to fix mistakes," adding "That work begins immediately".

Earlier, the British politician with Indian origin served as the Chancellor of the Exchequer from 2020 to 2022. He resigned from his chancellor post on July 5th this year amid the then PM Boris Johnson's government crisis and controversies. The resignation of Johnson followed soon after and the search for a new PM began under which Sunak participated however lost to Truss who succeeded Boris on September 5.

But Truss' reign lasted less than two months as she resigned due to another government crisis on October 20. The downfall of Truss came after when her government launched a 'mini budget' for driving the country's economy, however, faced heavy criticism from both the general public and members of her cabinet. The announcement even riled up markets with sterling pounds collapsing and British government bonds being dumped steeply by investors. The most talk of the mini budget was the hefty tax cuts including the abolition of a 45% tax rate on top earners, and reversing other tax rises.

Truss' exit was the second chance to fight for the leadership position and Sunak entered the race to be elected as the new PM once again. His rivals were Penny Mordaunt and the former PM Boris Johnson. However, later in the days to come, Johnson dropped out from the race on his own, while Mordaunt withdrew her candidacy.

The air became clear for Sunak to become the new leader of the Conservative Party and accordingly the new PM of the world's sixth-largest economy on October 25.

With his appointment, the blockchain industry feels that Sunak's appointment could likely bring a revolutionary paradigm shift in cryptocurrencies.

During his time as finance minister under the former PM Johnson's regime, Sunak had indicated making the UK into a crypto hub. As FM under Johnson's rule, Sunak announced Financial Services and Markets Bill, which, if it becomes law, could grant local regulators extensive control over the crypto industry.

Rajagopal Menon Vice president WazirX said, "Rishi Sunak is a fintech evangelist. His becoming PM is a big positive for crypto. Sunak stated his intention to make the UK a crypto hub while serving as chancellor."

Menon added, "He introduced the Financial Services and Markets Bill, which, if it becomes law, could grant local regulators extensive control over the crypto industry, beginning with the inclusion of asset-pegged cryptocurrency like stablecoins under the purview of payment regulations. Under his direction, the Royal Mint, which produces the nation's coins, was given the responsibility of developing a non-fungible token (NFT) collection."

Even billionaire Changpeng Zhao expects big things in the UK with Sunak's entry as PM.

The founder of Binance which is the world's largest crypto exchange in terms of daily trading volume, tweeted saying, "Said hi to RishiSunak for 2 seconds on Jun 20 (4 months ago, at a party). Didn't have a chance to chat. He just demonstrated a small setback often leads to big wins in the long run. Hoping for big things in UK."

On Tuesday, at CoinMarketCap, at the time of writing, the global crypto market cap is up by 1.8% over the last day to $941.73 billion. The largest cryptocurrencies like Bitcoin and Ethereum surged by over 1% and nearly 4% in the last 24 hours. BNB, Cardona, Solana, and Dogecoin also zoomed by 2-4% in the last 24 hours.

Bitcoin which is the largest cryptocurrency is currently slightly shy of nearly $19,500, while Ethereum the second largest crypto is around $1,380.

According to CoinMarketCap data, there are about 21,499 cryptocurrencies and 520 crypto exchanges.

The industry expects Sunak's arrival as the new PM to bring much-needed change to cryptocurrencies. But there is a catch because Sunak is also a long-time supporter of central bank-backed digital currencies.

Edul Patel, CEO, and co-founder of Mudrex - A Global Crypto Investing Platform said, "Rishi Sunak is supposedly a pro-crypto politician who is now at the helm of affairs in the UK. A significant chunk of the population in the UK is still skeptical about cryptocurrencies. Sunak's appointment could likely bring a revolutionary paradigm shift in that. However, there is a catch! Rishi Sunak has been a long-time proponent of the Central Bank Digital Currencies (CBDCs)."

CBDC is money that a central bank, like the Bank of England, can produce. It’s called digital or electronic because it isn’t physical money like notes and coins. It is in the form of an amount on a computer or similar device. UK citizens sometimes describe this possible UK digital currency as ‘digital sterling’ or ‘Britcoin’.

On the Bank of England website, it is said, CBDC is different from cryptocurrency (also known as crypto assets). Cryptocurrencies are not issued by a central bank. These privately issued digital currencies include Bitcoin, Ether (Ethereum), and XRP.

Thereby, Patel added that "it remains to be seen whether the crypto community would be excited about this appointment. However, it builds a strong case for the common people's awareness of blockchain and cryptocurrency."

Sunak has been the member of Parliament (MP) for Richmond in North Yorkshire since 2015. He also served as the Chief Secretary to the Treasury from 2019 to 2020. He has a degree in philosophy, politics, and economics (PPE) from Lincoln College, Oxford, and an MBA from Stanford University in California as a Fulbright Scholar. He voted in favor of May's Brexit withdrawal agreement three times.

He is married to Akshata Murty, the daughter of Indian billionaire N. R. Narayana Murthy who founded IT giant Infosys. Sunak has also worked at Goldman Sachs, and later as a partner at Children's Investment Fund Management and Theleme Partners. Sunak and Akshata have two daughters.

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