Treasury announces it will regulate some forms of cryptocurrency

Earlier this year the Treasury announced that it plans to validate stablecoins as a recognised form of payment. This will be part of a wider government initiative to 'make Britain a global hub for cryptoasset technology and investment'.

Stablecoins are digital units of value that rely on stabilisation tools to maintain a stable value over time. The value of a stablecoin is typically aligned to a specific real currency.

The government plans to legislate to bring stablecoins – where used as a means of payment – within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.

The initiative forms part of a package to ensure that the UK financial services sections remains at the cutting edge of technology, gives consumers freedom of choice, and attracts investment. The package includes:

• introducing a ‘financial market infrastructure sandbox’ to enable firms to experiment and innovate,

• establishing a Cryptoasset Engagement Group to work more closely with the industry,

• exploring ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market,

• and working with the Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take

Commenting on the issue, Chancellor Rishi Sunak said:

This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.

'It's my ambition to make the UK a global hub for cryptoasset technology, and the measures we've outlined . . . 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.'

Source: GOV.UK