The Economic and Finance Ministry in the United Kingdom recently announced its plans of incorporating stablecoins in its existing regulatory framework via amendments to allow them to be used as a means of payment. The HM Treasury made the announcement on Monday and said that there were some stablecoins that retail customers could utilize for widespread payment purposes. They had been conducting consultations regarding the matter with various individuals, universities and organizations in the United Kingdom for this purpose since January 2021. According to the UK government body, they plan on taking the required legislative measures that would allow them to integrate stablecoins into the existing framework.
This would most probably include making amendments to the existing legislation that applies to electronic money and payments. As per the Finance Ministry, the amendments they would make to the existing regulatory framework in the UK for incorporating stablecoins as a payment method would just be one part of the measures they would take in order to incorporate blockchain technology and digital assets in the region. A Cryptoasset Engagement Group was also announced by the government body that would work with the industry. The purpose of this group would be to determine how the tax system of the UK could be used to ensure development in the crypto space.
It would come in handy for establishing a sandbox for financial market infrastructure that innovative companies can use and the Royal Mint would also issue a non-fungible token (NFT) by summer 2022. Chancellor of the Exchequer, Rishi Sunak stated that his ambition was to transform the United Kingdom into a global crypto hub. He went on to say that the measures they had highlighted would allow crypto companies to invest, scale up and innovate. He added that they were taking all these steps to ensure that the finance industry of the United Kingdom continues to stay ahead in terms of innovation and technology.
The Treasury’s Economic Secretary, John Glen stated that the government was also trying to figure out how the tax system in the country could address crypto lending. They would also be doing consultations to determine if exemptions could be given to overseas investors under the Investor Manager Exemption on the crypto transactions conducted in the United Kingdom on their behalf. John Glen will be chair the Cryptoasset Engagement Group mentioned above and he would consult with regulatory and industry leaders for advising the UK government.
All of these signs indicate that the government is interested in regulating a wide range of crypto activities in the country, considering the adoption and growth of the market. Furthermore, the Financial Conduct Authority (FCA), which is the regulatory authority of the region, has scheduled a ‘CryptoSprint’ in May. The purpose is to allow industry participants to share how they can further develop a crypto regulatory framework. On Monday, John Glen spoke at the Innovate Finance Global Summit and said that the UK wanted to get started as quickly as possible if crypto really is going to be part of the future.