Two former Conservative Cabinet ministers have called for the UK to embrace cryptocurrency.

Despite turmoil in the markets which has seen the overall value of cryptocurrencies drop from a high of $3 trillion to under $1tr today, former Chancellor Philip Hammond and Conservative MP Matt Hancock – who has served as Digital Minister and Health Secretary – want the nation to be open to Web3 and blockchain innovation.

Hammond says the country is slipping behind its rivals in the European Union when it comes to the regulation of crypto.

“Particularly in the area of digital asset trading, I feel that the UK has missed a trick,” he told Bloomberg. “We are getting very close to the point where it will be too late. Other jurisdictions are racing ahead of us.”

Earlier this month, the UK Treasury proposed legislation to regulate cryptocurrency companies.

The consultation paper was published on May 31st in the wake of the Terra LUNA crypto and UST stablecoin collapse, which sent the entire sector into a downward spiral.

The paper highlighted the importance of stablecoins in innovation but also their impact upon wider financial stability, should systemic failures occur. It called for amendments to existing legislation around the Financial Market Infrastructure Special Administration Regime (FMI SAR), which was established to address the risks posed by the systemic failure of payment systems.

The new rules as proposed would give the Bank of England with oversight over cryptocurrency firms, with the power to appoint an administrator in the event of a failure.

In addition to the mandate to ensure continuity of services for firms that reach insolvency, the paper said, amendments would include an additional objective to ensure the return or transfer of customer funds and custody assets.

“The problem is that there are no regulations, and nobody quite knows where they stand, right?” Hammond continued. “It’s a bit of a Wild West, and has gained, frankly, a mixed reputation, particularly among policymakers and politicians and the public.”

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He added: “Getting this right, getting the rules around digital trading right, will be an essential prerequisite for being a player in the digitisation of traditional financial assets.”

Meanwhile Hancock argued that the UK should be liberal in its approach to regulation to help it become a “jurisdiction of choice for crypto”.

He also wants to see an “attractive” tax system introduced.

“The underlying technology is so powerful. Just because the DotCom bubble crashed in 2001, we didn’t discredit the internet as a technology,” he told Crypto AM.

“The job of the regulators is to make sure there is high-quality information and that the market functions effectively. What remit does the state have to tell them what they can and can’t invest in? I think that’s incredibly patronising.”