9:08 AM, 11th April 2022, About 2 years ago 2
The Treasury has announced moves to recognise ‘Stablecoins’ as a valid form of payment and part of wider plans to make Britain a global hub for Cryptoasset technology and investment.
This is part of a package of measures to ensure the UK financial services sector remains at the cutting edge of technology and includes:
Chancellor, Rishi Sunak said: “It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.
“We want to see the businesses of tomorrow, and the jobs they create, here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.
Stablecoins are a form of cryptoasset that are typically pegged to a fiat currency such as the dollar and are intended to maintain a stable value. With appropriate regulation, they could provide a more efficient means of payment and widen consumer choice.
The government intends to legislate to bring stablecoins, where used as a means of payment, within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.
By recognising the potential of this technology and regulating it now, the government can ensure financial stability and high regulatory standards so that these new technologies can ultimately be used both reliably and safely.
The UK’s vision for being a global hub for cryptoasset technology was set out in a speech by the Economic Secretary to the Treasury, John Glen at the Innovate Finance Global Summit today.
He also announced that the UK will proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets, which enables data to be synchronized and shared in a decentralised way to potentially achieve greater efficiency, transparency and resilience.
The government will legislate to establish a financial market infrastructure (FMI) ’Sandbox’ that will enable firms to experiment and innovate in providing the infrastructure services that underpin markets, in particular by enabling Distributed Ledger Technology to be tested. The government further confirmed that it will initiate a research programme to explore the feasibility and potential benefits of using DLT for sovereign debt instruments.
John Glen also confirmed that the government will consult on wider regulation of the cryptoasset sector later this year.
Other measures include:
In his Mansion House speech in July 2021, the Chancellor set out his vision for the future of the financial services sector, which included a plan to ensure that the UK remains at the forefront of technology and innovation. This was one of four key components of that vision, with the ultimate aim of building a financial services sector that continues to be one the rest of the world looks towards.
The government launched a consultation on cryptoassets and stablecoins last year and has today published its response setting out the next steps.
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