Matt Hancock MP: ‘Crypto failures are a sign of vibrancy’

Former health minister Matt Hancock has called for politicians and the Fintech industry to embrace failure as a sign of the vibrancy of crypto.

Speaking at Merge, a crypto event on Monday by Fintech Nexus, Hancock told attendees:

“Failures in growing industries, especially in disruptive industries that are building brand new technologies, are a good thing. They are a sign of the vibrancy of a market.”

“Often within a regulator you feel like there's a problem when there's been a failure, but no… that is called the free market, and we should applaud it.”

His comments come as the crypto industry continues to battle with the so-called Crypto Winter, where upwards of $2 trillion has been wiped off the value of major cryptocurrencies like Bitcoin and Ether, while investment into the sector declines.

Hancock also called on the FCA to take a hands-off approach and to not “stop people from acting, unless they have explicitly seen things that are against the rules… and since nobody knows what the rules are at the moment, that means that they should be very hands off.”

The MP, who was also Secretary of State for Digital, Culture, Media and Sport in 2018, said there is support for this approach both in Parliament and in industry.

“I'm absolutely clear that if there is a failure, it is not the FCA’s fault. In fact, if there are no failures, that is wrong of the FCA.”

Regulation of crypto around the world remains nascent.

The UK’s new Financial Services and Markets Bill is currently working its way through the House of Commons, with proposals for stablecoins and "digital settlement assets" to be brought under the remit of regulators

The International Monetary Fund last month published a report proposing a regulatory framework for the crypto industry, while the European Union reached an agreement this month for its Markets in Crypto Asset regulation, setting precedence for the broader crypto landscape in Europe.