The UK Department of Economics and Finance has said it intends to amend the existing regulatory framework to include stablecoins used as a means of payment.
On Monday, the UK Treasury said some stablecoins could potentially become “mainstream payment” for retail customers in the United Kingdom, following consultations with various organisations, universities and individuals starting in January 2021. “take the necessary legislative steps” to include stablecoins in its regulatory framework, “primarily by amending existing legislation on e-money and payments.”
The Treasury Department has said that amending its regulatory framework to include stablecoins as a means of payment is just part of a “package of measures” aimed at including cryptocurrency assets and blockchain technology in the United Kingdom. The state body also announced the creation of a crypto asset engagement group “to work more closely with the industry”, explore how the country’s tax system can stimulate the development of the cryptocurrency market, create a “financial market infrastructure sandbox” designed for innovative firms, and introduce a non-fungible token. issued by the Royal Mint in the summer of 2022.
“I am committed to making the UK a global hub for crypto asset technology and the measures we outlined today will help ensure that companies have the opportunity to invest, innovate and expand in this country,” said Rishi Sunak, Chancellor of the Exchequer. “This is part of our plan to ensure that the UK financial services industry is always at the forefront of technology and innovation.”
John Glen, the finance minister for economic affairs, said the government would look into how lending in crypto could be treated in the country’s tax system and would hold consultations to see if foreign investors could be exempt from UK taxes on crypto transactions. conducted on their behalf pursuant to the Investment Manager’s Exemption. He will create and lead a Crypto Asset Engagement Group advising industry leaders and regulators to advise the UK government.
The response to the consultation stated that the UK plans to explore the possibility of regulating a “broader set of crypto-asset transactions”, given the growth and spread of the market. In addition, the country’s financial authority, the Financial Conduct Authority, or FCA, has said it will host a “CryptoSprint” event in May that aims to listen to industry participants on how the development of the regulatory framework for cryptocurrencies can be continued in the United Kingdom.
“If crypto technologies are going to be a big part of the future, then we in the UK want to be on the ground floor,” Glen said at the Innovate Finance Global Summit on Monday. “In this country, we have already said that we will seek to protect consumers by passing laws to include certain crypto assets in the scope of regulation of financial stocks.”
Related: UK Financial Watchdog Seeks Crypto Talent Amid New Crackdown
The UK government’s announcement comes after the FCA announced the extension of the provisional registration status of some firms offering cryptocurrency services after an initial March 31 deadline. In addition, the Bank of England and a group of UK regulators said in March that they were evaluating cryptocurrency regulation, specifically noting that they “welcome” proposals from HM Treasury to include stablecoins in the country’s regulatory framework.