EU Data Act smart contract ‘kill switch’ brings uncertainty
On June 28, the European Council and Parliament achieved a political consensus on the Data Act, which moves the legislation regarding non-personal data closer to fruition.
Thierry Breton, European Union commissioner for the internal market, described the agreement in an X post as a “milestone in the reshaping the digital space.”
Another deal!
⁰Tonight’s agreement on the #DataAct is a milestone in reshaping the digital space.Thanks to the swift work of the EP @delcastillop & the Council Presidency, we are on the way of a thriving data economy that is innovative & open — on our conditions. pic.twitter.com/vTWUU8xTx9
— Thierry Breton (@ThierryBreton) June 27, 2023
The Data Act complements the Data Governance Act of November 2020 by clarifying who can create value from data and under which conditions. It stems from the European Strategy for Data, announced in February 2020, which also aims to position the EU as a regulatory frontrunner in the era of data-driven society.
The Data Act is part of the European Commission’s wider data strategy aimed at making Europe a global leader in the data-agile economy. In simple terms, the Data Act proposes new rules on who can access and use data generated in the EU across all economic sectors.
For the Data Act to become law, it must be approved by a vote of the European Parliament and the Council, which represent the bloc’s 27 member states. And once again, as with the Markets in Crypto-Assets (MiCA) regulation, the crypto sector is facing a major challenge. The problem raised by the new EU data law could permanently change the use of smart contracts in the European Economic Area (EEA) –– and not for the better.
Smart contract “kill switch”
The blockchain community is largely concerned about one provision in the Data Act, namely that automated data-sharing agreements contain a “kill switch” by which they could be terminated or halted in the event of a security breach.
Many blockchain experts contend that the current definition of smart contracts in the Data Act is broad, fearing it may lead to unintended consequences for existing smart contracts on public blockchains. For example, the text of the upcoming law doesn’t distinguish between just digital contracts and smart contracts utilizing distributed ledger technology.
But above all, the Data Act supposedly doesn’t give clear details about the conditions under which safe termination or interruption kill switch should occur, and it is hard to predict the potential outcomes with a higher degree of certainty. The smart contract architecture often doesn’t allow for termination or interruption, as blockchain technology is praised for being immutable and irreversible.
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The Data Act also doesn’t say exactly what a “data sharing agreement” is, and it doesn’t explain if the smart contracts currently ubiquitous in Web3 applications follow these kinds of agreements.
“By design, most of smart contracts don’t offer a termination or interruption feature and are often un-upgradable to ensure higher levels of protection from abusive behaviors,” Marina Markežič, executive director and co-founder of European Crypto Initiative, told Cointelegraph.
“The fact that smart contracts lack such features puts their use and development at risk. They may be perceived as inconsistent with regulatory requirements.”
“The problem is if the scope of Article 30 were to be extended beyond the application of smart contracts in this narrowly defined context, and on public permissionless networks. It becomes not only problematic but almost impossible for such protocols to comply,” he said.
Per Voloder, another concern is whether these rules could spill over into decentralized finance (DeFi). “As we do not have a DeFi regulation, this is a question that will need an answer over the next 18 months as the EC prepares its position on DeFi.”
Moreover, kill switches can have errors because of human mistakes and, in smart contracts in general, “as they are rigid, bounded information environments.” This rigidity, plus an automatic feature that triggers a certain outcome following strict rules, could lead to issues like locking up assets, shutting down protocols or even losing funds and important data, said Voloder.
A lot of uncertainty
The Data Act has rules for vendors of an app using smart contracts, or for people whose business involves deploying smart contracts.
According to Markežič, the Data Act might cause such vendors and deployers to be more cautious and consider whether their smart contracts in any way contain a data-sharing agreement. Apps might need to change how they work to meet these rules if their smart contracts share data.
But first, it’s crucial to understand who exactly needs to follow these rules, Markežič said:
Erwin Voloder, head of policy at the European Blockchain Association, told Cointelegraph that Article 30 of the Data Act applies when parties agree to share data using a smart contract, and this contract follows the rules. It should be fine if it’s only for that situation, especially when used on a controlled network where the Data Act’s safety stop can be used.
“Is the regulation even targeted toward DeFi platforms and protocols? […] It should be clarified under what circumstances the ‘access control’ is provided, what, who, why and how the ‘safe termination or interruption’ measure is triggered and how protocols prevent further abusive behavior thereof.”
Markežič stated that, in the past, some changes and terminations were made on a protocol layer as part of the overall governance mechanisms.
A kill switch on the level of a smart contract might lump projects and individuals into “a single point of failure, prescribed by the regulators.”
Therefore, it’s critical that regulators clarify who has the power to use this kill switch.
Crypto community across the globe reacts
The crypto community has already proposed some alternative solutions to bring more legal clarity to smart contracts.
In April 2023, Polygon had already penned an open letter suggesting how to improve Article 30, sating that lawmakers could apply these rules to enterprises only, excluding software and developers, and make clear that smart contracts aren’t “agreements” in and of themselves.
More recently, the European Crypto Initiative and numerous organizations, such as Stellar, Iota, Polygon, Near, Coinbase, Cardano and ConsenSys, have signed an open letter voicing their concerns regarding the Data Act and calling on lawmakers to reconsider and clarify certain aspects.
We called on lawmakers to reconsider and clarify certain aspects of the #DataAct in our Open Letter, written with other 5 organisations and 55 signatories ✉️https://t.co/37IrdSsFXC
— European Crypto Initiative (@EuCInitiative) August 8, 2023
They argued that the Data Act could potentially clash with the recently agreed MiCA regulation. MiCA, which will come into force in 2024, provides a license for crypto exchanges and wallet providers to operate throughout the EU.
They further claim that European lawmakers deliberately sidestepped the more complex issue of decentralized financial regulation –– an issue the Commission will need to revisit in the coming years.
More harm than good?
The trialogue on the Data Act has been completed, and this means that the text has reached its final version and is likely to be enacted in its current form.
According to Markežič, the new law could affect the European crypto industry and businesses that want to operate in the EU, stating that the Data Act doesn’t give clear details about what use cases the new rules apply to, and that makes the whole industry unsure about what to expect. And this is just the first step in the direction of regulating smart contracts, setting a precedent for forthcoming actions, she said.
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The next important step for the community is to work closely with European standardization groups. These groups are responsible for creating the standards that vendors and developers of smart contracts should follow when making agreements to share data, especially given that these vendors will need to make sure their smart contracts broadly align with the scope of Article 30.
According to Voloder, if the Data Act is extended to public networks, it could mean companies leaving the EU, at worst, and “otherwise being pigeonholed into a narrow development trajectory of smart contracts in the best case.”
“The result is capital flight, stifled innovation and a floundering blockchain industry in Europe. At a time when Europe is at the vanguard of the regulatory apex, the timing of such an outcome would be most inopportune.”
The cost of having staff is going up this Sunday as the increase in employers’ national insurance kicks in.
Chancellor Rachel Reeves announced in the October budget employers will have to pay a 15% rate of national insurance contributions (NIC) on their employees from 6 April – up from 13.8%.
She also lowered the threshold at which employers pay NIC from £9,100 a year to £5,000 a year, meaning they start paying at an earlier point on staff salaries.
This is on top of the national minimum wage rising, the business relief rate for hospitality, retail and leisure reducing from 75% to 40% and the rising cost of ingredients and services.
Sky News spoke to people working in some of the industries that will be hardest hit by the rise in NIC: Nurseries, hospitality, retail, small businesses and care.
NURSERIES
Nearly all (96% of 728) nurseries surveyed by the National Day Nurseries Association (NDNA) said they will have no choice but to put up fees because of the NIC rise, leaving parents to pick up the shortfall.
The NDNA has warned nurseries could close due to the rise, with 14% saying their business is at risk, 69% reducing spending on resources and 39% considering offering fewer places with government-funded hours as 92% said they do not cover their costs.
Sarah has two children, with her youngest starting later this month, but they were just informed fees will now be £92 a day – compared with £59 at the same nursery when her eldest started five years ago.
“I’m not sure how we will afford this. Our salaries haven’t increased by 50% during this time,” she said.
“We’re stuck as there aren’t enough nursery spaces in our area, so we will have to struggle.”
Karen Richards, director of the Wolds Childcare group in Nottinghamshire, has started a petition to get the government to exempt private nurseries – the majority of providers – from the NIC changes as she said it is unfair nurseries in schools do not have to pay the NIC.
She told Sky News she will have to find about £183,000 next year to cover the increase across her five nurseries and reducing staff numbers is “not off the table” but it is more likely they will reduce the number of children they have.
Joeli Brearley, founder of Pregnant Then Screwed, said parents are yet again having to pay the price for the government’s actions. Pic: Pregnant Then Screwed
Joeli Brearley, founder of the Pregnant Then Screwed campaign group, told Sky News: “Parents are already drowning in childcare costs, and now, thanks to the national insurance hike, nurseries are passing even more fees on to families who simply can’t afford it.
“It’s the same story every time – parents pay the price while the government looks the other way. How exactly are we meant to ‘boost the economy’ when we can’t even afford to go to work?”
Purnima Tanuku, executive chair of the NDNA, said staffing costs make up about 75% of nurseries’ costs and they will have to find £2,600 more per employee to pay for the NIC rise – £47,000 for an average nursery.
“The government says it wants to offer ‘cheaper childcare’ for parents on the one hand but then with the other expects nurseries to absorb the costs of National Insurance Contributions themselves,” she told Sky News.
“High-quality early education and care gives children the best start in life and enables parents to work. The government must invest in this vital infrastructure to make sure nurseries can continue to deliver this social and economic good.”
HOSPITALITY
The hospitality industry has warned of closures, price rises, lack of growth and shorter opening hours.
Dan Brod, co-owner of The Beckford Group, a small southwest England restaurant and country pub/hotel group, said the economic situation now is “much worse” than during COVID.
The group has put plans for two more projects on hold and Mr Brod said the only option is to put up prices, but with the rising supplier costs, wages, business rates and NIC hike they will “stay still” financially.
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Dan Brod, co-owner of The Beckford Group, said the government does not value hospitality as an industry. Pic: The Beckford Group
He told Sky News: “What we’re nervous about is we’re still in the cost of living crisis and even though our places are in very wealthy areas of the country, Wiltshire, Somerset and Bath, people are feeling the situation in their pockets, people are going out less.”
Mr Brod said they are not getting rid of any staff as their business strongly depends on the quality of their hospitality so they are having to make savings elsewhere.
“I’m still optimistic, I still feel that humans need hospitality but we’re not valued as an industry and the social benefit is never taken into account by government.”
Chef/owner Aktar Islam, who runs Opheem in Birmingham, said the rise will cost him up to £120,000 more this year. Pic: Opheem
Aktar Islam, owner/chef at two Michelin-starred Opheem in Birmingham, said the NIC rise will cost him up to £120,000 more in staff costs a year and to maintain the financial position he is in now they would have to make “another million pounds”.
He got emails from eight suppliers on Thursday saying they were raising their costs, and said he will have to raise prices but is concerned about the impact on diners.
The restaurateur hires four commis chefs to train each year but will not be able to this year, or the next few.
“It’s very short-sighted of the government, you’re not going to grow the economy by taxing hospitality out of existence, these sort of businesses are the lifeblood of our economy,” he said.
“They think if a hospitality business closes another will open but people know it’s tough, why would they want to do that? It’s not going to happen.”
The chef sent hundreds of his “at home” kits to fellow chefs this week for their staff as an acknowledgement of how much of a “s*** show” the situation is – “a little hug from us”.
RETAIL
Some of the UK’s biggest retailers, including Tesco, Boots, Marks & Spencer and Next, wrote to Rachel Reeves after the budget to say the NIC hike would lead to higher consumer prices, smaller pay rises, job cuts and store closures.
The British Retail Consortium (BRC), representing more than 200 major retailers and brands, said the costs are so significant neither small or large retailers will be able to absorb them.
Andrew Bailey, the governor of the Bank of England, told the Treasury committee in November that job losses due to the NIC changes were likely to be higher than the 50,000 forecast by the Office for Budget Responsibility (OBR).
Big retailers have warned the NIC rise will lead to higher prices, job cuts and store closures. File pic: PA
Nick Stowe, chief executive of Monsoon and Accessorize, said retailers had the choice of protecting staff numbers or cancelling investment plans.
He said they were trying to protect staff numbers and would be increasing prices but they would likely have to halt plans to increase store numbers.
Helen Dickinson, head of the BRC, told Sky News the national living wage rise and NIC increase will cost businesses £5bn, adding more than 10% to the cost of hiring someone in an entry-level role.
A further tax on packaging coming in October means retailers will face £7bn in extra costs this year, she said.
“This huge cost burden will undoubtedly reduce investment in stores and jobs and is likely to lead to higher prices,” she added.
SMALL BUSINESSES
A massive 85% of 1,400 small business owners surveyed by the Federation of Small Businesses (FSB) in March reported rising costs compared with the same time last year, with 47% citing tax as the main barrier to growth – the highest level in more than a decade.
Just 8% of those businesses saw an increase in staff numbers over the last quarter, while 21% had to reduce their workforce.
Kate Rumsey, whose family has run Rumsey’s Chocolates in Wendover, Buckinghamshire and Thame, Oxfordshire, for 21 years, said the NIC rise, minimum wage increase and business relief rate reduction will push her staff costs up by 15 to 17% – £70,000 to £80,000 annually.
To offset those costs, she has had to reduce opening hours, including closing on Sundays and bank holidays in one shop for the first time ever, make one person redundant, not replace short-term staff and introduce a hiring freeze.
The soaring price of cocoa has added to her woes and she has had to increase prices by about 10% and will raise them further.
Kate Rumsey, who runs Rumsey’s Chocolates in Buckinghamshire and Oxfordshire, said they are being forced to take a short-term view to survive. Pic: Rumsey’s Chocolates
She told Sky News: “We’re very much taking more of a short-term view at the moment, it’s so seasonal in this business so I said to the team we’ll just get through Q1 then re-evaluate.
“I feel this is a bit about the survival of the fittest and many businesses won’t survive.”
Tina McKenzie, policy chair of the FSB, said the NIC rise “holds back growth” and has seen small business confidence drop to its lowest point since the first year of the pandemic.
With the “highest tax burden for 70 years”, she called on the chancellor to introduce a “raft of pro-small business measures” in the autumn budget so it can deliver on its pledge for growth.
She reminded employers they can claim the Employment Allowance, which has doubled after an FSB campaign to take the first £10,500 off an employer’s annual bill.
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National Insurance rise impacts carers
CARE
The care sector has been warning the government since the October that budget care homes will be forced to close due to the financial pressures the employers’ national insurance rise will place on them.
Care homes receive funding from councils as well as from private fees, but as local authorities feel the squeeze more and more their contributions are not keeping up with rising costs.
The industry has argued without it the NHS would be crippled.
Raj Sehgal, founding director of ArmsCare, a family-run group of six care homes in Norfolk, said the NIC increase means a £360,000 annual impact on the group’s £3.6m payroll.
In an attempt to offset those costs, the group is scrapping staff bonuses and freezing management salaries.
It is also considering reducing day hours, where there are more staff on, so the fewer numbers of night staff work longer hours and with no paid break.
Raj Sehgal said his family-owned group of care homes will need £360,000 extra this year for the NIC hike
Mr Sehgal said: “But what that does do unfortunately, is impact the quality you’re going to be able to provide, at a time when we need to be improving quality, but something has to give.
“The government just doesn’t seem to understand that the funding needs to be there. You cannot keep enforcing higher costs on businesses and not be able to fund those without actually finding the money from somewhere.”
He said the issue is exacerbated by the fact local authority funding, despite increasing to 5%, will not cover the 10% rise.
“It’s going to be a really, really tough ride. And we are going to see a number of providers close their doors,” he warned.
Nadra Ahmed, executive co-chair of the National Care Association, said those who receive, or are waiting to access, care as well as staff will feel the impact the hardest.
“As providers see further shortfalls in the commissioning of care services, they will start to limit what they can do to ensure their viability or, as a last resort exit the market,” she said.
“This is very short-sighted, with serious consequences, which alludes to the understanding of this government.”
Government decided to ‘wipe the slate clean’
A Treasury spokesperson told Sky News the government is “pro-business” but has “taken the difficult but necessary decisions to wipe the slate clean and properly fund our public services after years of declines”.
“Our budget choices have already delivered an NHS with falling waiting lists, a £3.7bn rescue package for social care, and vital protection for Britain’s small businesses,” they said.
“We’re making tough choices today to secure a better tomorrow through our Plan for Change. By investing in economic growth and early years education while capping corporation tax, we’re putting more money in working people’s pockets and giving every child the best start in life.”
From Doughty Street to Downing Street: from human rights barrister in a left-wing chambers to a prime minister tough on rioters and illegal migrants.
Five years after becoming Labour leader, Sir Keir Starmer has been on a remarkable journey. He turned left to win the party leadership and turned right to win a general election.
It has been five years of dramatic highs and lows: the elation of winning a landslide general election victory after the gloom of contemplating quitting following a by-election humiliation.
As opposition leader, Sir Keir purged the Labour left, including banishing his predecessor Jeremy Corbyn to the political wilderness, and flushed out the scourge of antisemitism.
As prime minister, within weeks of entering Number 10 he was confronted with riots on Britain’s streets. And throughout his premiership he has had to play a leading role internationally in a volatile and war-torn world.
Sir Keir has sought to distance himself from Jeremy Corbyn.
Pic: Reuters
At home, his government’s economic policies have been condemned by political opponents and some of his own MPs as a return to austerity. Labour’s opinion poll ratings have nose-dived.
Abroad, as well as the challenge of defending Ukraine against the brutality of Russia’s Vladimir Putin, the so-called “special relationship” with the United States has been tested to the limit by the erratic Donald Trump.
Five-year Keir was elected Labour leader on 4 April 2020, just weeks after prime minister Boris Johnson ordered a COVID lockdown that was ultimately to bring about his demise.
Sir Keir won 56% of the vote, defeating the Corbyn-backed left-wing candidate Rebecca Long-Bailey and Lisa Nandy from Labour’s soft left.
To win the backing of left-wing Labour activists, he backed a wealth tax on the top 5% of earners, abolishing university tuition fees, nationalising water and energy and restoring freedom of movement between the UK and EU countries. Whatever happened to those promises?
There was also a showbiz connection. When he was running for the leadership, a rumour persisted that he was the inspiration for Mark Darcy, the dashing human rights lawyer played by Colin Firth in the Bridget Jones movies.
But, alas for Sir Keir and his spin doctors, who did nothing to dispel the myth, several months after he became leader the Bridget Jones author Helen Fielding laid the rumour to rest – though she conceded they were very similar.
Bridget Jones author Helen Fielding said lawyer Mark Darcy is not based on Keir Starmer – but that the two have similarities. Pic: PA
Sir Keir had much bigger battles to fight, however. From day one as leader, he condemned antisemitism as “a stain on our party”. Within weeks he sacked his rival Ms Long-Bailey from his shadow cabinet in a dispute over antisemitism.
But in his ruthless determination to show the party had changed under his leadership, he had a bigger target: his predecessor Mr Corbyn, still the darling of left-wing Labour activists.
After the former leader claimed the scale of antisemitism in the Labour party had been “dramatically overstated for political reasons”, Sir Keir struck, suspending him for refusing to retract his comments and then finally expelling him a month before last year’s general election.
But while he was winning that battle, Sir Keir’s first year did not go well at the ballot box. In 2021, in the first by-election after Boris Johnson’s 80-seat victory in the 2019 general election, Labour lost the previously safe seat of Hartlepool to the Conservatives. The swing against Labour was a huge 16%.
It was his lowest low point of the last five years. Stunned by the Hartlepool defeat, Sir Keir panicked, sacking his chief whip Nick Brown and attempting to demote his deputy, Angela Rayner, stripping her of her posts as party chair and campaign coordinator.
But it backfired as she fought back and emerged stronger than ever. She gained the titles of shadow chancellor of the Duchy of Lancaster and shadow secretary of state for work. Four years later, her Employment Rights Bill is in the House of Lords and on course to become law.
Sir Keir tried to demote Labour’s deputy leader Angela Rayner after the party lost the Hartlepool by-election. Pic: PA
Last year, in a Sky News interview with political editor Beth Rigby, Sir Keir admitted he had considered quitting. “I did, because I didn’t feel that I should be bigger than the party and that if I couldn’t bring about the change, perhaps there should be a change,” he said.
But it wasn’t just the result in Hartlepool that was damaging. In 2022, in a scandal the Conservatives called “beergate”, he and Ms Rayner were accused of breaching lockdown rules by eating curry and drinking beer in Durham while campaigning in the by-election.
He was cleared, but at the height of the Tory onslaught he said he would resign if he was issued with a fixed penalty notice. It was another low point. But in 2022 it was Mr Johnson who was forced to quit over breaking COVID rules, not Sir Keir.
A top civil servant, Sue Gray, produced a damning and ultimately fatal “partygate” report, accusing Mr Johnson of lying to parliament, Liz Truss came and went – her brief 49-day tenure likened to the life of a lettuce – and Rishi Sunak became the Tories’ fifth prime minister in six years.
Sir Keir was on his way. But it was his turn to stun his opponents in 2023 when he announced that Sue Gray was to become his chief of staff, in a move the Tories claimed was treachery and proof that she had been biased against Mr Johnson.
After producing her partygate report into COVID lockdown parties, Sue Gray went on to become Sir Keir’s chief of staff.
Pic: Rex/Tayfun Salci/ZUMA Press Wire/Shutterstock
But though she lasted longer than “lettuce” Liz Truss, Sue Gray didn’t survive for long. Within months of Labour’s 2024 election victory she was out, the victim of a vicious power struggle with a Number 10 “boys’ club” led by Starmer’s campaign chief Morgan McSweeney, who helped himself to her job as chief of staff.
On the back of several by-election successes and sweeping local government gains, when Mr Sunak shocked his own party on 22 May by announcing a 4 July general election, Labour entered the campaign as overwhelming favourites to win a big majority.
A turning point in the campaign came on 2 June when Nigel Farage announced a comeback as Reform UK leader and declared that he would, after months of keeping his opponents guessing, be a candidate after all.
As a result, Reform UK won 4.1m votes, piling up votes in the tens of thousands in hundreds of seats, mostly at the expense of the Conservatives, and handing a landslide to Sir Keir: 411 Labour MPs and a majority of 172.
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His triumph came close to rivalling Tony Blair’s landslides of 1997 and 2001 with one crucial difference: Labour polled just 34% of the vote, the lowest share for a party winning a majority.
During the campaign, Sir Keir faced tough scrutiny not just about his pledges not to increase income tax, VAT or national insurance, but also about his character and personality.
In “The Battle for Number 10” on Sky News, a 90-minute event in Grimsby featuring Sir Keir and Mr Sunak, the Labour leader froze when a member of the audience told him he seemed like a “political robot”.
Sir Keir Starmer faced audience questions during a Sky News election event with Sky’s political editor Beth Rigby, in Grimsby.
Pic: PA
He also squirmed when another audience member challenged him on why he now condemned Mr Corbyn when five years earlier he told voters he would make a great prime minister.
Yet despite those difficult moments, the event was more bruising for Mr Sunak than Sir Keir and a YouGov poll declared a decisive victory for the Labour leader, by 64% to 36%
But there was to be no honeymoon period for Sir Keir after Labour’s landslide. Within days of his election victory, riots following the killing of three young girls at a dance class in Southport presented the new prime minister with a law and order crisis.
His background as Director of Public Prosecutions served him well, however, and he showed a steely determination in ensuring rioters were dealt with swiftly and severely by the courts, though critics hit out at inconsistencies in sentencing and branded him “Two-tier Keir”.
Another crisis was self-inflicted. Many in his own party were shocked by the staggering amount of freebies, gifts and hospitality he and his wife accepted since he became Labour leader, many paid for by a millionaire Labour donor Lord Alli. According to a Sky News investigation, their total worth was more than £100,000.
Lord Waheed Alli, 59, was appointed Sir Keir Starmer’s chief campaign fundraiser in 2022. Pic: PA
They included expensive clothes for the PM and his wife, luxury designer spectacles for Sir Keir, hospitality at his beloved Arsenal FC, free accommodation in a flat owned by Lord Alli and – perhaps the most contentious – freebie tickets to a Taylor Swift concert at Wembley Stadium, all worth eye-watering amounts.
To make matters worse, the “freebie-gate” scandal engulfed the PM at a time when his chancellor, Rachel Reeves, was cutting winter fuel payments for pensioners, the first of a series of controversial moves by the woman derided as “Rachel from Accounts” by political opponents that have badly damaged Sir Keir’s government in its first nine months.
Sir Keir Starmer continues to stand by his Chancellor Rachel Reeves
The two-child benefit cap, national insurance rises in her October budget, benefit cuts last month and no compensation for the so-called Waspi women have all infuriated many Labour MPs and put Sir Keir’s loyalty to his chancellor under strain.
He’s standing by her for now. “I have full confidence in the chancellor,” he declared, tetchily, when challenged by a Tory MP at PMQs just minutes before her spring statement last week.
But for how long? Most prime ministers eventually fall out with their chancellor: Margaret Thatcher with Sir Geoffrey Howe and then Nigel Lawson in the 1980s and later Tony Blair and Gordon Brown. Be warned, Rachel!
On foreign policy, the PM’s record is better. His baptism on the world stage, at a NATO summit in Washington in his first week as PM, helped him swiftly establish a reputation as a safe pair of hands and reliable ally on foreign policy.
Keir Starmer met with Joe Biden at his first NATO summit
Though the UK is no longer in the EU, Sir Keir has forged strong alliances with European leaders – particularly France’s President Macron – as he attempts to build a “coalition of the willing” to defend Ukraine. And he has won the trust of Ukraine’s President Zelenskyy.
And on his biggest foreign policy challenge, establishing good relations with the maverick President Trump, the verdict – even after the president’s tariffs bombshell – is so far, so good.
Starmer has pledged to work with Ukraine and its President Volodymyr Zelenskyy to end the war and defend the country from Russia. Pic: AP
His Trump Tower dinner last September went well, his White House stunt with an envelope containing King Charles’ state visit invitation was a diplomatic masterstroke and the 10% tariffs slapped on the UK could have been a lot worse.
Now comes the really hard part for Five-Year Keir: securing a trade deal with the US, bringing peace to Ukraine without a sell-out or concessions to Vladimir Putin, smashing the gangs smuggling illegal migrants, tackling welfare reform and – the biggest challenge – finding that elusive economic growth at home while the Trump tariffs make autumn tax rises look almost inevitable.
Sir Keir Starmer met Donald Trump at the White House in February. Pic: PA
No pressure, then prime minister. If the lows of Sir Keir’s first five years as Labour leader took the shine off the highs, the next five years – to the next election and perhaps beyond – look even more challenging.
And the journey from Doughty Street to Downing Street is now just a distant memory.
US Securities and Exchange Commission (SEC) Commissioner and vocal crypto critic Caroline Crenshaw has accused the US regulator of downplaying risks and misrepresenting the US stablecoin market in its newly published guidelines.
However, many in the crypto industry see the SEC’s decision as a step in the right direction.
In an April 4 statement, Crenshaw said that the SEC’s statement on stablecoins — issued on the same day — contained “legal and factual errors that paint a distorted picture of the USD-stablecoin market that drastically understates its risks.”
Crenshaw disagrees, crypto industry applauds
Under the new SEC guidelines, stablecoins that meet certain criteria are now considered “non-securities” and are exempt from transaction reporting requirements.
Crenshaw disputed the accuracy of the analysis made by the SEC in arriving at that decision. She pushed back on the SEC for reiterating issuer actions “that supposedly stabilize price, ensure redeemability, and otherwise reduce risk.”
Source: David Sacks
The SEC said that “albeit briefly, that some USD-stablecoins are available to retail purchasers only through an intermediary and not directly from the issuer.”
Crenshaw argued this was misleading. She said:
“It is the general rule, not the exception, that these coins are available to the retail public only through intermediaries who sell them on the secondary market, such as crypto trading platforms.”
“Over 90% of USD-stablecoins in circulation are distributed in this way,” Crenshaw added.
Meanwhile, many in the crypto industry expressed optimism over the decision.
Token Metrics founder Ian Ballina said it “feels like a clear step in focusing on what really matters in the crypto space.” Vemanti CEO Tan Tran said he wished the SEC reached this point three years ago, while Midnight Network’s head of partnerships Ian Kane said it “feels like progress for crypto folks trying to play by the rules.”
Crenshaw said it is “also grossly inaccurate” for the SEC to reassure users that an issuer has sufficient reserves to satisfy unlimited redemption requests just because its reserve is valued “at or above the par value of its outstanding coins.”
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“The issuer’s overall financial health and solvency cannot be judged by the value of its reserve, which tells us nothing about its liabilities, risk from proprietary financial activities, and so forth,” Crenshaw said.
She explained that stablecoins always carry some risk, particularly during market stress or when their price begins to fall.
It comes only weeks after stablecoin issuer Tether was reportedly engaging with a Big Four accounting firm to audit its assets reserve and verify that its USDT stablecoin is backed at a 1:1 ratio.
On March 22, Cointelegraph reported that Tether CEO Paolo Ardoino said the audit process would be more straightforward under pro-crypto US President Donald Trump.
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