Market Loop - UK government sets out crypto ambitions

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5th April 2022

Bite-sized business news from the UK and beyond

Good morning After 40 years of public ownership, Channel 4 is headed into private hands. The free-to-air broadcaster is state owned but receives no public funding, with more than 90% of its revenue coming from adverts.
The government says that proceeds from the sale – which could be as much as £1bn - will be reinvested in a "creative dividend" to be shared among the TV industry, with some of it earmarked for independent production companies.

Today's stories

UK government sets out crypto ambitions
Elon Musk scoops up $3bn of Twitter shares

CRYPTO
UK government sets out crypto ambitions

What’s going on?
The chancellor Rishi Sunak has announced plans to make the UK a “global crypto hub” including the launch of the first government backed non-fungible token or NFT this summer.

Why is this important?

The global crypto market is worth an estimated $2tr and includes digital currencies like Bitcoin, infamous for its volatile prices. Critics of crypto, including many financial regulators around the world, argue that the lack of regulation makes it a hotbed for criminal activity and there are also environmental concerns as huge energy consuming super-computers are used to mine them.

Despite this the government and the Bank of England have been exploring the idea of a UK digital cryptocurrency and regulating the sector since last year.

It’s seen as a way to help the UK fintech scene and cement London’s position as a global financial centre, especially in the wake of Brexit which threatened to change this status.

The UK is not the only country trying to position itself as a crypto leader. Last year El Salvador become the first country to make Bitcoin legal tender. This means alongside the US Dollar, Bitcoin is an official currency and can be used to buy any good or service.

Yesterday Rishi Sunak laid out measures to bring the notoriously unregulated crypto sector under more regulatory scrutiny including the launch of the first government-backed NFT this summer.

NFTs are tradable, unique digital items that have taken the internet by storm over the past few years with art, music and videos the most popular items becoming NFTs. They are built using the same technologies as cryptocurrencies known as blockchain.

Zooming out

The launch of a UK government backed NFT would be a huge milestone on the road to digital assets becoming more mainstream. But like cryptocurrencies they are known for their volatility. It's not clear yet what the government NFT would be used for, what it would cost or who could buy it.

Other stories to keep you in the loop

Morrisons’ new owners green light plans to sell £500m worth of property
Ted Baker puts itself up for sale after third US private equity bid
Tesla delivers record number of cars despite challenges
Kinder Surprise chocolate eggs recalled over salmonella fears
Sri Lankan government resigns as economic crisis fuels rage on the streets
JP Morgan could lose up to $1bn from exposure in Russia
Female workers at Revolut paid 25% less than men

TECH
Elon Musk scoops up $3bn of Twitter shares

Elon Musk, the world’s richest man and the CEO of electric car maker Tesla, has become Twitter’s biggest shareholder, after taking a 9.2% stake in the company for $2.9bn. Twitter’s shares jumped 25% higher in response.

Notably, Musk now owns more than four times the 2.25% holding of Twitter’s co-founder Jack Dorsey.

The Tesla boss is known for his eccentric behaviour, usually on Twitter, (for example asking followers if he should sell 10% of his Tesla shares) and has been critical of the social media app for not supporting free speech.

Analysts believe the shareholding taken by Musk could eventually result in him mounting a bid to takeover the microblogging site completely. Pretty surprising given he recently he said he is giving "serious thought" to building a new social media platform.

But why create a social media site from scratch when you can invest in one that already exists? Musk’s personal fortune is estimated at almost $300bn, buying 9% in Twitter, as Bloomberg put it, is the same as the average American buying a MacBook Pro.

Stat of the day

Wind and solar generated over 10% of global electricity for the first time in 2021, doubling since 2015

Interesting links from around the web

How thinking about 'future you' can build a happier life
Newsround at 50: Five memorable moments as Newsround celebrates anniversary
13 of the best TV shows to watch this April

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Market Loop - UK government sets out crypto ambitions

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