The UK government has announced that it will regulate stablecoins so they can be used as a valid form of payment in stores around the country. The decision to regulate stablecoins is a part of wider plans for the country to become “a global hub for cryptoasset technology and investment”.
The plan to regulate stablecoins is part of a larger package of items the government’s interested in. Other items include the launch of a financial market infrastructure sandbox that will allow firms to innovate, the creation of a Cryptoasset Engagement Group that will work closely with industry on crypto, the government wants to improve the tax system to improve the cryptoasset market, and it’ll work with the Royal Mint on a Non-Fungible Token (NFT) this summer to celebrate the moves the government is making on the crypto front.
Commenting on the news, Chancellor Rishi Sunak said:
“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.”
By putting these regulations in place now, the government hopes for the technology to develop reliably and safely. On an aside, the Chancellor also stated that the UK is exploring the use of Distributed Ledger Technology (DLT) in UK financial markets which would see data shared in a decentralised manner and possible achieve more efficiency, transparency, and resilience.