Hot Hashtag: Is #Brexit Bad for Fintech?
In the past months, the fintech sector has taken notice of England’s upcoming June 23 referendum to determine the fate of the island’s membership in the European Union. #Brexit, the handle acting as hub around the question of Britain’s potential “exit,” has had a reach of over 6.8 million Twitter users in the past three days.
The impetus for Britain’s leaving the EU seems to be a growing public dissatisfaction with the European Union, with some authorities going so far as to say that the EU won’t grow until its member states surrender greater sovereignty, huddle-up and work more like a federation. This is something few expect the U.K. to do.
In other words, proponents of “Brexiting” see EU-membership as a raw deal, left on the unreachable table for so long it’s already soured.
However, fintech authorities generally believe that in leaving the EU, London will lose ground in the fintech race against San Francisco, New York, Berlin, Hong Kong and Luxembourg. The last of which, being the economic crossroads of the EU, might take over London’s place in Europe as fintech leader. Others say Berlin will take the baton, while still others, like Property Partner’s Gandesha, worry an exit from the EU would reduce the prospect of growth opportunities in Europe, making the notion of corporate immigration to the new world an increasingly enticing prospect.
Supporting the argument that Brexit success will weaken London fintech is a 200-page report the English Treasury released yesterday, detailing the impact leaving the EU would have on the U.K. Naturally U.K.’s leaving the EU wouldn’t mean the secession of all economic relations with the continent. If it exits, Britain could obtain a Norway-style membership in the EEA, or a bilateral trade agreement like that between the EU and Switzerland, Croatia or Turkey, or it could resign to membership in the WTO without any additional stipulations, a la Brazil or Russia.
Whatever the outcome of this historic June 23 referendum, the fintech consensus is that a Brexit victory would be a fintech loss.
