by Rita Liu, CEO, Mode Global Holdings
Apple’s new crypto and NFT guidelines are causing commotion. On the one hand, it’s helping to enforce regulation and driving consumer protection. On the other, it’s taxing a burgeoning sector for the privilege of using iOS.
Before getting into the specific pros and cons, it’s worth taking a step back to consider where we are and why that matters. After the white heat of a pandemic-fuelled bull run, crypto has now descended into winter.
Conversations which were front page news when prices were surging have fallen down the pecking order. This has not stopped the industry from innovating, however, and the ecosystem continues to evolve.
For example, progress is being made in building a sustainable oversight infrastructure – notably via the Financial Services and Markets Bill. But firm regulation and its enforcement, which would help provide direction and credibility, is yet to fully materialise.
Crypto is a new and innovative space so it’s understandable that no one wants to be constricted. However, the certainty and credibility regulation can provide may offer guidelines to help firms and the industry flourish in the long term, rather than clip their wings. It’s simple, if we are to continue increasing mass adoption of crypto, consumers need to be protected.
In that context, Apple’s specific updates are a step in the right direction. The point about enforcing regulation is good – it will ensure bona fide firms and help everyone play to the appropriate rules across various jurisdictions. The other change in rules, regarding NFTs, is more controversial.
Questions about Apple ring fencing revenue and subjecting developers to its in-app purchase mechanism are legitimate. Developers have complained about the significant levy already and it could be argued it’s hobbling the industry just as it starts to take more confident strides.
Apple is taking out competition before the market develops, and for many it will be a hammer blow. However, for many it’s the price for doing business with a tech giant and gaining the exposure that comes with it.
There is another important aspect here that shouldn’t be overlooked. This news coincides with Rishi Sunk’s appointment as Prime Minister. A man who is previously seen as a crypto advocate, and has been influential in setting out the current government framework.
For the UK to achieve Sunak’s ambition of becoming a crypto hub, all companies operating here need guidance. Hopefully with Sunak in office, a clearer regulatory roadmap will be laid out, with a firm emphasis on enforcement.
The FCA enforcing the UK’s crypto regulatory regime via the likes of the AMLD5 registration regime will be essential in helping to protect the integrity of the UK’s crypto industry and build its crypto hub proposition.
Not enforcing it will leave the space open for non-compliant, offshore companies, which will ultimately hurt the crypto industry and customers in the UK. Apple stepping in now and providing structure and accountability could provide a springboard for our crypto scene.
So, is Apple’s intervention perfect? No. Is it a partial step in the right direction? Yes. For too long Crypto has been dismissed as the Wild West, full of techies looking to make a quick buck from a Ponzi Scheme. This could not be further from the truth and regulatory support will help, not hinder the industry and attract more talent, capital and investment to these shores. The world’s biggest company helping to enforce said regulation is no bad thing.
That said, I understand why many in the industry are angry. Being subject to a 30% tax for each purchase via iOS will be painful, and will no doubt mean some of this being passed on to consumers, who are fighting a cost of living crisis.
However, the other part of the update will help move the regulatory landscape on a little, to help drive innovation, investment and opportunity, which has to be a good thing. Consumer protection is of paramount importance, and if this helps deliver that, then it could deliver a more robust and flourishing crypto industry in the future.