Off the back of the fall of Silicon Valley Bank (SVB) and its UK arm being saved by HSBC, the reaffirmation of Prime Minister Rishi Sunak that he will continue to focus on tech has been welcomed by many in the sector.
Sunak was speaking prior to meeting Joe Biden in the US yesterday, as turmoil within financial markets across the Atlantic evolved through the day.
Nonetheless, the Prime Minister emphasised that he hoped the steps taken by HSBC were enough to help ‘SVB UK customers feel reassured today by the strength, safety and security that today’s news brings them, and excited about the opportunities a global bank like HSBC can give them to grow around the world’.
He added: “I will always be on the side of entrepreneurs, innovators, young people inventing the future. Because the biggest lesson I took from my time in California still guides me now.
“What really matters for economic success – is innovation. If we want our country to succeed, we need to do what we’ve always done and embrace new technologies, and the people and culture that creates them. No serious analysis of our prospects could conclude anything different.”
Su Carpenter, Director of Operations of CryptoUK, underlined the importance of SVP UK customers being able to access their deposits and banking services as usual – describing it as ‘a huge relief for the crypto and technology sectors’.
She continued: “We also welcome Prime Minister Rishi Sunak’s reaffirmation of his commitment to financial innovation, highlighting its critical role in the UK’s economic future, in the announcement of the HSBC deal and in advance of Wednesday’s budget.”
That being said, she also mapped out that the events of the last few days have exposed the need for strengthened access between banks and crypto businesses.
She added that this is something that CryptoUK has ‘continued to raise with the government and regulators’.
“SVB had a lot of crypto businesses and fintech customers. The purchase of SVB UK by HSBC is an indication that they are accepting crypto businesses as viable customers and arguably recognising their potential – which is more than many UK banks have been willing to do to date,” stated Carpenter
“We welcome this and hope that we see an increase in the number of larger institutions willing to provide financial products,including lending and custody, to crypto businesses. This would help drive innovation, better protect consumers, and help crypto businesses de-risk by spreading funds across more providers. We are advocating for policymakers and regulators to enable this shift by providing a progressive regulatory framework.
“To date many banks have been ‘protecting’ themselves from crypto exposure, by limiting or banning crypto transactions and demonstrating limited appetite for providing banking relationships and services to our sector. Given the recent turn of events crypto firms must now consider how to ‘protect’ themselves and their customers from banking exposures, and we will be looking at ways to support and educate our members on how they can de-risk their businesses in this regard.”