The UK Ministry of Economy and Finance has stated its intention to modify its current regulatory framework to incorporate stablecoins used as a means of payment.
In an announcement made on Monday, the Ministry of Economy and Finance said that cCertain stablecoins could potentially become “a pervasive means of payment” for retail customers in the UK following consultation with various organisations, universities and individuals that began in January 2021. The British government body said it intended to “take the necessary legislative steps” to bring stablecoins into its regulatory framework, “primarily by amending existing legislation on electronic money and payments.”
The Finance Ministry said amending its regulatory framework to include stablecoins as a means of payment was just one part of a “package of measures” aimed at bringing crypto assets and blockchain technology into the UK. The government body also announced the creation of a Crypto Asset Engagement Group “to work more closely with the industry,” exploring how the country’s tax system could foster cryptocurrency market development, establishing a “market infrastructure sandbox.” financial” aimed at innovative companies, and introducing a non-fungible token issued by the Royal Mint in the summer of 2022.
“My ambition is to make the UK a global hub for crypto asset technology, and the measures we have outlined today will help ensure businesses can invest, innovate and scale in this country”Said Rishi Sunak, Minister of Finance. “This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
John Glen, the Economic Secretary of the Treasury, said that The government will review how crypto loans can be treated in the country’s tax system and will inquire to see if foreign investors could be exempt from UK tax for cryptocurrency transactions made on their behalf under the Investment Manager Exemption. He will establish and chair the Cryptoasset Engagement Group, consulting with industry and regulatory leaders to advise the UK Government.
The response to the query suggested that the UK plans to explore regulation of “a broader set of crypto-asset activities”, given the growth and adoption of the market. What’s more, The country’s financial watchdog, the Financial Conduct Authority, or FCA, said it will hold a “CryptoSprint” event in May with the aim of hearing from industry participants on how a regulatory framework for cryptocurrencies could be developed in the United Kingdom.
“If crypto technologies are going to be a big part of the future, then we, the UK, want to be on the ground floor”, said Glen at the Global Innovate Finance Summit on Monday. “In this country, we have already said that we will seek to protect consumers by legislating to include certain crypto assets in the scope of financial promotion regulation.”
The UK government statement came after the FCA announced that it had extended the temporary registration status of some companies offering crypto services beyond the original deadline of March 31. What’s more, the Bank of England and a group of UK regulators said in March that they were evaluating crypto regulation, specifically noting that they “welcomed” proposals from Her Majesty’s Treasury to bring stablecoins into the country’s regulatory framework.
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