The UK government has announced plans that will see stablecoins recognized as a valid form of payment under local laws as part of wider plans to make Britain a global hub for crypto-asset technology and investment.
“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“. read an announcement on the government website.
According to the statement, the said plans would be achieved through the legislation of a ‘financial market infrastructure sandbox’ aimed at helping firms experiment and innovate and would be spearheaded by the Finacial Conduct Authority (FCA) and a Crypto Engagement Group which would go hand in hand with the industry.
Furthermore, Rishi Sunak, Chancellor of the Exchequer also directed the creation of a new “Royal Mint NFT” which the UK plans to issue by the summer. The Royal Mint NFT is intended to be “an emblem” of the UK’s “forward-looking approach” to crypto-assets.
“This is part of a package of measures to ensure the UK financial services sector remains at the cutting edge of technology, attracting investment and jobs and widening consumer choice.”
The UK is also exploring ways to encourage innovation in the crypto industry by ensuring that the existing tax regime is friendly, particularly to DeFi lenders.
The move comes barely two weeks after the bank of England announced plans to sketch the first crypto regulatory framework for the UK after years of giving the nascent industry a cold shoulder.
As per the Monday announcement, the UK now seeks to ensure financial stability and high regulatory standards so that blockchain tech can be used reliably and safely. Furthermore, the fear of missing out on such a futuristic technology has become a reality for the once hostile regime with Rishi Sunak suggesting that the UK did not want to be left out.
“It’s my ambition to make the UK a global hub for crypto assets technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” Rishi said in a statement. “This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
The UK will also ‘proactively explore’ the potential transformative benefits of distributed ledger technology (DLT) in the UK financial markets, before embedding it in the government’s information systems to boost efficiency resilience, and transparency.