Rishi Sunak succeeded Liz Truss as the new Prime Minister of the United Kingdom on the 24th of October as rivals quit the race. Truss only lasted 44 days in the office. However, a lot could change with Sunak sitting in such an important role.
Rishi Sunak is the new PM of the UK
⚡️ @RishiSunak will take over as prime minister of the United Kingdom #RishiSunak
📉Sunak has been given the task of guiding Britain through an economic crisis
🇬🇧King Charles will urge Sunak to create a cabinet in place of #LizTruss who only lasted 44 days #news #politics pic.twitter.com/2YbOEI68Ez
— Investro.com (@investrocom) October 24, 2022
In just seven weeks, Rishi Sunak has become the third prime minister of the UK. After Penny Mordaunt pulled out of the leadership competition two minutes before the deadline, he was the only candidate to receive a successful nomination.
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Sunak later made a TV appearance where he showed gratefulness for being chosen for his new position and mentioned how the United Kingdom faces a “profound economic challenge.” Sunak pledged to work day in, day out for the British people.
He became the UK’s youngest prime minister in more than 200 years when Robert Banks Jenkinson came to the office in 1812 at 42 years old. While some people celebrate this event, many also question Sunak as he is among the 250 wealthiest British people.
The reported wealth of his family is approximately $800 million, coming from a “technology and hedge fund.” Sunak is undoubtedly one of the richest prime ministers to serve the UK. His financial literacy could actually help pull the country out of a recession as Britons are suffering from a rising cost of living.
Moreover, his wealth could allow him to focus more on people than money. But what exactly does his victory mean for the UK?
Sunak supports the use of CBDCs
Jolly good time old chap 🇬🇧🇬🇧 pic.twitter.com/hl1Y5tzEj5
— Coin Bureau (@coinbureau) October 25, 2022
While most governments are skeptical regarding crypto, Sunak has been pushing the country to support cryptocurrency since he served as Exchequer’s Chancellor. It is unclear whether he supports all the cryptocurrencies like Bitcoin or Ethereum. But, he is clearly vocal about Central Bank Digital Currencies (CBDCs) because they would be under central banks’ control. On the other hand, cryptocurrencies are not.
“Central Bank Digital Currencies could be a digital version of money, a bit like a digital banknote that could be used alongside physical notes and coins. Key priorities to consider are having a safe and secure transaction that can offer other ways to pay, be energy efficient and available to everyone,” Sunak added.
Sunak claimed that earlier this year, he announced a joint task force between the Bank of England (BoE) and the U.K. Treasury to study CBDCs. He referred to the exploration as a crucial step in supporting cryptocurrencies and cooperating with foreign partners.
Although this is not entirely a bullish signal for crypto investors, it is indirectly supporting cryptocurrencies and directly supporting digital currencies. The two systems could be used alongside each other and be treated as a centralized system (CBDCs) next to a decentralized system (cryptocurrencies).
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Sunak definitely wants the UK to be a part of this new technology as he announced a plan to make the country a global cryptoasset technology hub back in April. His plan is to keep the UK financial services industry at the forefront of technology, luring in investment and jobs while increasing consumer choice.
Bottom line
CBDCs may have many benefits, like faster transactions and lower fees, but there are big question marks regarding privacy along with regulatory measures. CBDCs may offer the same advantages as cryptocurrencies. However, the benefit of privacy and decentralization will disappear. So it is not entirely bad or good news as CBDCs will not only bring pros, but cons as well.
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