Can the UK become a Web3 hub? A look at Coinbase’s vision and recommendations

On April 18th, Coinbase emphasized in a blog article on April 16th that the UK can “accelerate” its cryptocurrency industry and become the “innovation center of the Web3 economy”. As part of its vision, the company is conducting business in the UK and Europe. Coinbase praised the ongoing regulatory efforts in the region and made nine recommendations on how the UK can ‘consolidate its position as a Web3 hub’.

Coinbase: The UK can become the “innovation center of the Web3 economy”

Introduction

On April 16th, cryptocurrency exchange Coinbase published a blog post outlining its vision for the UK as an ‘innovation center of the Web3 economy’. The company praised the ongoing regulatory efforts in the region and provided nine recommendations for how the UK can ‘accelerate’ its cryptocurrency industry and become a Web3 hub.

The Current State of the UK’s Cryptocurrency Industry

Before we delve into Coinbase’s recommendations for a future Web3 hub in the UK, let’s take a look at the current state of the country’s cryptocurrency industry. Despite regulatory challenges, the UK has seen an increase in cryptocurrency adoption and innovation. In fact, London has become a hotbed for cryptocurrency and blockchain-related startups.

Coinbase’s Vision for the UK’s Web3 Future

According to Coinbase, the UK has the potential to become an ‘innovation center’ for the Web3 economy. This would require the country to embrace and lead the shift towards Web3, which is commonly referred to as the next iteration of the internet. Web3 is expected to be more decentralized, secure, and user-centric compared to the current Web2.

Coinbase’s Recommendations

In its blog post, Coinbase provided nine recommendations for how the UK can ‘consolidate its position as a Web3 hub’. These recommendations include:
1. Embrace a ‘do no harm’ regulatory approach
2. Clarify and simplify tax rules for cryptocurrency transactions
3. Establish a crypto-specific regulator
4. Designate a regulator for stablecoins
5. Facilitate banking relationships for cryptocurrency businesses
6. Develop a framework for decentralized autonomous organizations (DAOs)
7. Establish a research fund for blockchain technology
8. Encourage the adoption of cryptocurrencies by government agencies
9. Provide clarity on the treatment of cryptocurrencies in inheritance tax

Challenges to Becoming a Web3 Hub

While Coinbase’s vision and recommendations are promising, there are limitations that may hinder the UK’s potential as a Web3 hub. For instance, the country’s departure from the European Union has increased uncertainty and may limit access to funding from the European Investment Fund. Additionally, while London’s startup scene is booming, the overall investment in cryptocurrency and blockchain technology in the UK has been declining since 2018.

Conclusion

Coinbase’s vision for the UK as a Web3 hub is an inspiring one, and its recommendations provide a clear path for achieving that goal. However, challenges including regulatory uncertainty and declining investment may impede progress towards that future. Regardless, if the UK can address these challenges and embrace Web3, it has the potential to become a leader in the next iteration of the internet.

FAQs

Q: What is Web3?
A: Web3 is the next iteration of the internet and is expected to be more decentralized, secure, and user-centric compared to the current Web2.
Q: What is Coinbase?
A: Coinbase is a cryptocurrency exchange that allows users to buy, sell, and store digital currencies.
Q: What are DAOs?
A: DAOs, or decentralized autonomous organizations, are organizations that are run by rules encoded as computer programs on a blockchain.