UK Unveils Ambitions for Global Cryptoasset Technology Hub
(5 April 2022 – United Kingdom) The United Kingdom (UK) government has announced moves to make Stablecoins recognised as a valid form of payment as part of broader plans to elevate Britain into a global hub for Cryptoasset technology and investment.
Stablecoins are to be included within regulation implementing their use in the UK as a recognised means of payment. 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.
Measures include legislating for a ‘financial market infrastructure sandbox’ to help firms innovate, a Financial Conduct Authority (FCA) led ‘CryptoSprint’, working with the Royal Mint on an Non-Fungible Token (NFT) and an engagement group to work more closely with financial services participants. The move seeks to establish a Cryptoasset Engagement Group to work more closely with the industry and explore ways of enhancing the competitiveness of the UK tax system to encourage further development of the Cryptoasset market.
The move matches similar action by the Australian Prudential Regulatory Authority (APRA) relaying its expectations around Cryptoassets and flagging Banks to “proceed with care”. Regulation of the financial system is necessary “because history has taught us that, left to its own devices, the system is prone to bouts of instability and considerable harm to society” commented APRA Chair, Wayne Byres. In the United States, the Federal Deposit Insurance Corporation has instructed banks to ensure they update it on any cryptocurrency-focused projects they are working on or are considering, following a similar instruction issued by the Office of the Comptroller of the Currency in November. The agencies are not prohibiting such activities but wish to be continually informed and aware of developments to evaluate any potential risks.
"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” commented Chancellor of the Exchequer, Rishi Sunak.
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