UK seeks to become leader in crypto, stablecoin regulation

The UK Finance Ministry is looking at regulating the stablecoin and crypto sector to pave the way for innovation, a move that shifts away from its previous regressive policies concerning the nascent industry.

In a statement made Monday, the Treasury set out an elaborated plan to rebuild the country’s regulatory policies around stablecoins as an efficient mode of payment. It is part of a broader plan that seeks to “make Britain a global hub for cryptoasset technology and investment.” Summarizing its more recent plans, the Treasury noted:

“Measures include legislating for a ‘financial market infrastructure sandbox’ to help firms innovate, an FCA-led ‘CryptoSprint’, working with the Royal Mint on an NFT, and an engagement group to work more closely with industry.”

Watch live as Economic Secretary to the Treasury @JohnGlenUK tells the @InnFin Global Finance Summit the steps we are taking to position the UK as a global hub for cryptoasset technology. https://t.co/qJMXHpK01p

— HM Treasury (@hmtreasury) April 4, 2022

Stablecoins are forms of cryptocurrencies that are pegged to traditional currencies, such as the US Dollar and the British Pound, or exchange-traded commodities, such as precious metals and oils. The ministry has predicted Stablecoins to “provide a more efficient means of payment and widen consumer choice.”

“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,” Rishi Sunak, Chancellor of the Exchequer, said in a statement.

The Chancellor has also directed the Royal Mint to create a non-fungible token which will issue sometime this summer. Meanwhile, not many details were provided concerning the government-issued NFT.

Chancellor @RishiSunak has asked @RoyalMintUK to create an NFT to be issued by the summer.

This decision shows the the forward-looking approach we are determined to take towards cryptoassets in the UK. pic.twitter.com/cd0tiailBK

— HM Treasury (@hmtreasury) April 4, 2022

A detailed report released Monday discussed the Treasury’s in-depth plans to bring stablecoins within the confines of regulatory parameters. It has sought to create a framework that supports adoption while mitigating any potential risks. Key amendments will be seen in the UK tax system, which will likely need a major treatment to become more inclusive of the crypto and DeFi sector.

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