The UK remains committed to becoming a global hub of the cryptocurrency industry despite recent negative market developments. It is “the sector to which I have dedicated the most time”, said the deputy and economic secretary of the Treasury of SM, Andrew Griffith, at a meeting of the British Parliament’s Treasury Committee on 10 January, underlining that commitment.
The introduction of a wholesale stablecoin and the Financial Markets Infrastructure (IMF) sandbox will be the next steps in the process. These elements are included in the Financial Services and Markets (FSM) Bill, which will have its second reading in the House of Lords also on January 10.
A stablecoin will likely serve as the “first use case for what will likely be a wholesale settlement coin” in the “long term” leading to the possible introduction of a central bank digital currency (CBDC), Griffith said.
Griffith defended the work being done on stablecoinstating that stablecoins are “already here” and therefore need immediate attention; noting that it is unclear if a CBDC would displace private stablecoins in the market should such a form of money be introduced.
A British retail CBDC, should it be introduced, would be an anonymous and brokered platform by design, Griffith said.
A consultative document on the CBDC will appear “in weeks, not months”, to be followed by another on the regulation of cryptocurrencies in general. The Government will also hold at least six round tables with the cryptocurrency sector this year.
It is not “the position of the Government that this [la tecnología basada en cripto] be an inevitability,” Griffith said, but added that current technology cannot solve problems in the financial sector such as settlement time “in a disruptive way” as blockchain technology can.
The @CommonsTreasury Inquiry in to #Cryptoassets continues today with another oral evidence session. This time including Andrew Griffith MP, Economic Secretary.#crypto #cryptoregulation #cryptoinquiry
TODAY AT 9.45am
Watch the whole inquiry live https://t.co/sXYxzrnNlt pic.twitter.com/ltxK8cTKbo— CryptoUK (@CryptoUKAssoc) January 10, 2023
For retail users, Griffith drew a clear line between crypto as an investment and as a means of payment. Unbacked cryptocurrency may or may not “find a role in the market,” Griffith contended.
Payment methods based on cryptocurrencies are a matter of digital and financial inclusion, but “There is a very strong commitment to continued use and access to cash,” in which banks continue to have a place. According to Griffith:
“Eliminating that middleman, certainly in the current evolution of the market, seems very premature.”
The bill on the WSF, which could “be ready for Easter”, it will also allow the authorization of some new payment applications in the IMF “sandbox” and their introduction into the market. Use cases for cryptocurrency-based wholesale fintech may be on the books and records “in the middle office” for now, Griffith said.
Full regulation of crypto asset markets will not be achieved by 2023, Griffith assured a committee member. The legislation will adhere to the principle of “same asset, same regulation.”
Meanwhile, the monitoring of cryptocurrency advertisements plays an important role in protecting consumers. Consumers can look for the logo of the Financial Conduct Authority (FCA) in promotions to know they are dealing with a regulated organization, Treasury deputy director for payments and financial technology Laura Mountford told the committee.
Be that as it may, yesOnly about 40% of consumers “understand or consider that they are buying crypto assets as a gamble”, Mountford said, citing the FCA’s tracking.
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