Chancellor of the Exchequer, Jeremy Hunt, has set out UK financial sector reforms aiming to place the UK as the global finance centre.

Hunt plans to create a smarter regulatory framework for the UK that he hopes will be more agile, less costly, and more responsive to emerging trends.

Hunt’s announcement builds on the UK Government’s ‘vision’ for the sector, as set out in the Chancellor’s speech at Mansion House in 2021, for an open, sustainable, and technologically advanced financial services sector.

The hope is for the UK to become globally competitive, acting in the interests of communities, creating jobs, supporting businesses, and accelerating growth across the four UK nations.

Britain’s financial services sector plays a vital part of the UK economy, contributing £216 billion a year. This includes £76bn in tax revenue, while employing over more than 2 million people.

Around two thirds of these are located outside of London, with hubs in Belfast, Birmingham, Cardiff, Edinburgh, Glasgow, Leeds, and Manchester.

In 2021 alone, the financial services sector contributed £173.6bn to the UK economy, 8.3% of total economic output.

Hunt said: “We are committed to securing the UK’s status as one of the most open, dynamic and competitive financial services hubs in the world.

“The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses.

“And we will go further – delivering reform of burdensome EU laws that choke off growth in other industries such as digital technology and life sciences.”

As part of the ‘Edinburgh Reforms’, the government said it hopes to create a regulatory framework that ‘supports innovation and leadership in emerging areas of finance, facilitating the adoption of cutting-edge technologies’.

In his announcement, Hunt noted the FSM Bill, which will establish a safe regulatory environment for stablecoins to make payments in the future.

This, the statement, read, would ensure the government has ‘the necessary powers to bring a broader range of investment-related crypto asset activities into UK regulation’.

As part of this, the government is will be consulting on a UK retail central bank digital currency alongside the Bank of England in the coming weeks.

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Additionally, a response to the consultation on expanding the Investment Manager Exemption to include crypto assets will be published, as well as announcement of implementation of a Financial Market Infrastructure Sandbox in 2023.

Hunt concluded: “I am confident that the measures announced today, in tandem with the work taken forward through the FSM Bill, will deliver for this key growth sector, and the people and businesses that rely upon it.”

Economic Secretary to the Treasury, Andrew Griffith said: “The UK is a financial services superpower – and we have long benefited from, and are committed to, high quality regulatory standards.

“Scotland’s role in maintaining our status as the global benchmark for regulation is crucial – with Edinburgh and Glasgow the two largest UK hubs outside of London.

“Our reforms deliver smarter regulation of financial services that will unlock growth and opportunity in towns and cities across the UK.”

Peter Curk, CEO of digital currency social trading platform ICONOMI, said: “Today we saw a more engaged and progressive UK Government than ever before in terms of its perception and appreciation of digital currencies.

“What many ‘traditional’ financial services commentators still resist, or even deny, is that a modern and crypto-inclusive financial services industry in the UK is necessary for the UK economy to grow as a whole.

“Today’s Edinburgh Reforms Statement is a positive step in achieving this and means that the UK is a stronger position to establish itself as a leader in the global space. The opportunity is there to be seized and whoever does so will build an even stronger economy with crypto a central pillar to it.”

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