Embracing new tech policy can propel the UK forward

The UK stands at a pivotal moment, reflected in the King’s Speech to Parliament last week calling for the country to “pursue sustainable growth by encouraging investment in industry, skills, and new technologies.”

The new Labour government has the opportunity to meet this very achievable goal by crafting policy for new technologies that supports the nation’s economic growth, whilst also protecting consumers.

Today, there are a few transformative technologies that can catalyse an economy in this way — one is blockchain technologies. By blockchains, we don’t mean the “casino” dominated by speculation that can invite scams and nefarious actors. Rather, we mean the blockchain technologies that are powering a new computing movement.

In this sense, blockchains and crypto are a way to build new networks, ensuring people have voice and choice in the networks they contribute to and use every day. This is in stark contrast to incumbent Big Tech platforms like Facebook/Instagram, TikTok, and Twitter, which dictate and influence our lives, unilaterally decide for all their users, and can change the rules at a moment’s notice.

Right now, blockchain technology is “up for grabs” from a policy and regulatory perspective: No jurisdiction globally has enacted clear policies that encourage well-intended entrepreneurs, keep out nefarious actors, and protect consumers while also encouraging innovation.

Crypto can be a polarising topic, but the industry has been growing steadily. Today, it is used by millions and there is already a large contingent of entrepreneurs hailing from UK universities as well as traditional UK-based companies and institutions (including the NHS) using the technology.

This spring, when we hosted our twelve week Crypto Startup Accelerator program in London, 25 startups came together looking to build businesses based on or powered by blockchain technologies. These projects ranged across various industries — including a way to decentralise bio-samples through a marketplace; address abuses of copyright in a world of AI; and automate private securitisation transactions. Bringing these innovative entrepreneurs to London showcased the potential opportunity of building the tech startup community in the UK.

We at a16z chose to open our first office outside the US last year here in the UK. Why? Because we recognise the country’s extraordinary, undeniable strengths — not just its history in science and the industrial revolution, but its potential and power: world-class universities, deep pools of talent, capital markets, and growing tech ecosystem.

Startups are eager to stay, grow, and build legitimate blockchain-based applications and businesses in the UK. But the lack of regulatory clarity means entrepreneurs can’t build useful applications, and will go elsewhere if necessary.

The UK cannot afford to let this happen.

Today, there is no holistic regulatory framework implemented yet for crypto in the UK.  The government’s policy priority needs to be incentivising the cornerstone of blockchain technology — decentralisation. Decentralisation is the core benefit of blockchains and crypto — enabling apps and services to redistribute data, power, and revenue from the current Big Tech oligarchy back to customers.

In what is fast becoming a global race for who will dominate future growth, the United States took meaningful steps here when the House of Representatives recently passed a bill with strong support from both Democrats and Republicans. This legislation provides guardrails for responsible blockchain innovation by establishing clear rules around when a blockchain project, and its associated crypto assets, move from centralised to decentralised.

By developing licensing and disclosure frameworks suited to decentralised cryptoassets, the UK would be the first to provide guardrails for responsible blockchain innovation. Likewise, by appropriately restricting insiders from trading cryptoassets before a project reaches sufficient decentralisation, policymakers can ensure that consumers are protected from market abuse. These policies will help to spur entrepreneurship and growth in UK crypto companies, while also keeping UK consumers safe.

It is the only way to disrupt centralised services and platforms, since decentralised services built on top of blockchains provide key mechanisms for users to own and control their digital information (whether personal photos or health data) and participate in platform decisions. Creators and small businesses can develop a direct relationship with their audiences/ fans, and decide what to keep or charge — instead of the exorbitant rates centralised platforms currently take.

As the Labour government holds its Global Investment Summit in its first 100 days in office, we urge these leaders to discuss smart blockchain policy. The “embrace” of new technology is not about less regulation that allows bad actors to fill the void, potentially harming consumers. Nor is it about more or restrictive regulation that stifles innovation.

History shows us that balanced, nuanced regulation that fosters innovation, protects consumers, attracts long-term investment, and sets a global standard. Such an approach to technology and policy has been proven to lead to sustained and broad-based economic growth and job creation, and would do the same for the UK.

The UK has the potential to cultivate the next generation of tech leaders domestically — thereby bolstering the country’s economic might for decades to come. Let’s empower the UK to revolutionise the future of technology and science again.