The United Kingdom has made it clear that it remains dedicated to becoming a world leader in the cryptocurrency industry, and that stablecoins would receive immediate attention.
Economic Secretary Andrew Griffith of the HM Treasury told a meeting of the UK Parliament Treasury Committee on January 10th that the sector is one “I have dedicated the most time to.”
In order to further solidify this position, the introduction of a wholesale stablecoin and the Financial Markets Infrastructure (FMI) sandbox will be the next steps in the process. These elements are included in the Financial Services and Markets (FSM) bill, which had its second reading in the House of Lords, also on January 10th.
In an article in CoinTelegraph, it was reported that Griffith defended the work being done on the wholesale stablecoin, stating that stablecoins are already “here now” and therefore in need of immediate attention. He also noted that it is uncertain whether a Central Bank Digital Currency (CBDC) would displace private stablecoins on the market if one were to be introduced.
A retail British CBDC, if one were to be introduced, would be an anonymized and intermediated platform by design, Griffith said.
In addition, a consultative paper on CBDCs will be released “in weeks, not months,” followed by another on crypto regulation more broadly. The government also plans to hold at least six roundtables with the crypto sector this year.
While Griffith stated that it is “not the government’s position that this [crypto-based technology] is an inevitability,” he acknowledged that current technology cannot solve issues in the financial sector such as settlement time “in a disruptive way” as blockchain technology can.
The FSM bill, which may be passed by Easter, will also enable the licensing of new payment apps in the FMI sandbox and their introduction onto the market. The use cases for crypto-based wholesale fintech may be in ledgers and registers “in the middle office” for now, Griffith said.
Despite the UK’s push to become a crypto hub, full regulation of crypto asset markets will not be achieved in 2023, assured Griffith. Legislation will adhere to the principle of “same asset, same regulation.”
In the meantime, oversight of crypto promotions is playing an important role in consumer protection. Consumers can look for the Financial Conduct Authority (FCA) logo on promotions to ensure they are dealing with a regulated organisation. Treasury Deputy Director of Payments and Fintech Laura Mountford told the committee.
It’s worth noting that only about 40% of consumers “understand or consider that they are buying crypto assets as a gamble,” according to FCA monitoring, this highlights the importance of consumer protection and education.
The United Kingdom is making it clear that it’s serious about becoming a crypto hub and is moving forward with several initiatives to help make that happen. The introduction of a wholesale stablecoin, the FMI sandbox, and the FSM bill are all steps in the right direction, but there’s still a long way to go before full regulation of crypto markets is achieved.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.