Liz Truss has resigned from her post as Britain’s prime minister after a 44-day term that rocked the country’s sterling and gilt markets.
The outgoing crypto-friendly prime minister stepped down after calls from at least twelve members of the Conservative Party.
Impact of Truss Tax-Reduction on Gilt and Sterling
Later in her address, Truss said she would remain in office until another leader was elected. The leader will be selected through a leadership election on October 28, 2022. Rishi Sunak, former Chancellor of the Exchequer, Penny Mordaunt, leader of the House of Commons, or one of several other leaders could end up with the top job.
Additionally, the truce has officially informed His Majesty King Charles III of his resignation.
Britain’s gilt and sterling markets rebound after the prime minister announced a £45bn tax-cutting programme. After the “mini-budget” announcement, which reduced the tax for wealthy Britons from 45% to 40%, sterling declined sharply. Later, the mini-budget also severely affected pension funds reliant on gilt markets, prompting the Bank of England to step in as a “market maker of last resort”. After the mini-budget, Truss fired his former chancellor Quasi Quarteng. Later, Home Secretary Suella Braverman was also forced to resign on October 19, 2022.
Following the announcement of the truce, the ten-year yield rose to 4.18% and sterling rose 5% to $1.1278. Gilts remained high after the last rally when the truss dropped its tax-cutting plans.
Accordingly, a Twitter trader, Trader1sz, Confirmed That was for the UK currency below. A currency bottom means that sterling has already reached its lowest point during this market cycle and can only go up.
Following the announcement, Bitcoin rose by about 0.6% to $1,311 and Ethereum by about 1% to $1,304.
Pro-crypto Truss Out, Future Uncertain
Crypto industry pundits welcomed Truss into office on September 6, 2022, hoping he would provide a lighter regulatory touch. She indicated a more complementary approach to crypto in a 2018 tweet, which gave the crypto industry reason to hope:
As Secretary of State for International Trade under former British Prime Minister Boris Johnson, Truss established a business network he thought could benefit greatly from blockchain technology.
“We want to achieve a world-leading data and digital protocol, underwriting data flow, but also tackle issues like blockchain and artificial intelligence, ensuring that we and the US are leading the world. and are able to share these economic opportunities,” she said. said at that time.
Following Truss’s resignation, the future of crypto in the UK remains uncertain. As one trader put it, the UK could be in for a tough period:
The Financial Services and Markets Bill, currently under committee debate in the House of Commons, could be put on the back burner. The next meeting for discussion is scheduled for October 26 and October 27, 2022. The bill deals with stablecoin regulation in the UK. The bill would only allow UK citizens to use reserve-backed stablecoins.
Future crypto regulation may depend on whether the new prime minister retains current Chancellor Jeremy Hunt. Hunt will present plans to put £40 billion into the UK’s public accounts on October 31, 2022.
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