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There have been discussions about the United Kingdom exiting from the European Union for a while now. Most of us know that the European Union is not doing that great when it comes to the economy. Many EU countries have been suffering from economic slowdown for years. Greece has been in financial ruins for years now, France is not doing so good either, Germany, Netherlands and rest of the Europe are affected by the counter-sanctions imposed by the Russian Federation.
The United Kingdom has been doing better financially compared to its other EU counterparts. Britain has realized that it’s contributions to be part of the European Union is costing them much and they have been contemplating to move away from the European Union for a while now. Popularly terms as Brexit, if Britain decides to split from the EU, the overall financial situation if the Union is going to be impacted. At the same time, it will lead to companies operating from Britain to lose unregulated access to the European Market. It is also worth noting that if Britain decided to exit the European Union, Scotland may again call for a referendum to separate itself from the United Kingdom, triggering a scenario where other territories may also follow suit.
Such eventualities may lead to Britain-based companies lose access to market and suffer financial losses. Britain is the home for many Bitcoin and Fintech companies as London has been trying hard to become the financial capital of not just EU but the whole world. Until now, London offered favorable regulations and access to vast European markets for these companies. If Britain moves away from EU, then these companies will end up losing the only advantage they have had compared to their counterparts in other regions.
The threat of Brexit has got many companies, especially those in Bitcoin and Fintech sector thinking about relocating their operations from Britain to other favorable regions in the European Union. According to a report published by Reuters, seven out of ten Fintech companies the news agency interviewed expressed their intention to move out of London to a more favorable destination like Dublin or Luxembourg if Britain exits the European Union. The article also states that the country’s Fintech sector earned over 6.6 billion pounds last year alone, which is more than any other country during the same period.
Many Bitcoin and blockchain based startups have made Britain their home, where some of them have also been working with traditional fintech and banking sectors in the country offering solutions. A shift in the balance will even affect these companies.
Any developments with regard to Britain’s exit from the European union will be known in the next four months. If the country indeed decides to walk away from the European Union, companies will have to renegotiate to gain required clearance to operate in rest of the European Union. In such a scenario, whether these fintech companies will do good with their threats or not is not definitive yet. However, irrespective of whether the companies will move out or not, they will be at the losing end.
What will Britain do is a 6-billion-pound question for which we have to wait for few months to gain the answer.
Ref: Reuters UK
