The U.K. has released a detailed plan to regulate stablecoins as payments. Also they have the intention to create a blockchain sandbox to mark Her Majesty’s entry into the “crypto hub” race.
Stablecoins have a stable value linked to traditional currencies or assets like gold. They are less volatile than cryptocurrencies such as Bitcoin.
The Treasury also said it planned to consult on regulating a much more comprehensive range of digital currencies later this year through the Crypto Hub.
Chancellor Rishi Sunak said:
“We want to see tomorrow’s [cryptocurrency] businesses – and the jobs they create – here in the UK. We can give them the confidence they need to think and invest long-term by regulating effectively.”
The Treasury is not sure which stablecoins will be regulated; well-known ones include Tether and Binance USD.
Stablecoins are currently used in the United States to facilitate trading. Or lending or borrowing of other digital assets.
Fast Facts About Stablecoin and Crypto Hub
- The government plans to amend the Banking Act 2009 and the Financial Services (Banking Reform) Act 2013 to bring certain stablecoin payments into its regulatory purview.
- Economic Secretary John Glen said the Bank of England and the Financial Conduct Authority would launch a regulatory sandbox to test distributed ledger technology (DLT) in the financial market. To explore the issuance of sovereign debts such as British government bonds.
- Glen added that they would also start a consultation later this year on expanding the regulating scope. They want to further expand the crypto-assets such as Bitcoin while considering the industry’s energy consumption.
- The Royal Mint has been tasked with creating non-fungible tokens (NFTs) this summer, but details have not been made public.
- Gemini’s latest report shows that about one in five (18%) U.K. adults own cryptocurrencies, with nearly half (45%) of them turning investors in the asset class last year.
