The UK now validates stablecoins as an accepted method of payment and is moving forward to launch an international hub for technology and investment in crypto-assets, according to a declaration of the UK Government’s HM Treasury.
Stablecoins will be integrated into a regulatory framework, paving the way for use in the UK as a recognized payment method.
“My ambition is to make the UK a global hub for crypto-asset technology, and the measures we have outlined today will help ensure businesses can invest, innovate and grow 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 for the long term,” said Rishi Sunak, Chancellor of the Exchequer.
Sunak added that the move is part of the agency’s plan to ensure the UK is “always at the forefront of technology and innovation” when it comes to the financial services sector.
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Stablecoins are cryptocurrencies that rely on stable assets for their value and are usually pegged to fiat currency or exchange-traded commodities. Proper regulation should provide a more efficient means of payment and increase consumer choice.
The UK government intends to bring stablecoins as a form of payment into the payments regulatory perimeter and create conditions under which stablecoin issuers and service providers can operate and invest in the region.
“By recognizing 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 reliably and safely,” the statement said.
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Economic Secretary to the Treasury John Glen outlined the UK’s plans in a speech earlier this week at the Innovate Finance Global Summit. Plans also include exploring the implementation of Distributed Ledger Technology (DLT) in UK financial markets, which would allow decentralized sharing of data.
Glen also said the government is planning a consultation regarding broader regulation of the crypto asset sector later this year.