The British government announced plans to begin regulating stablecoins, paving the way for their recognition as an accepted form of payment in the country. This move is part of a wider initiative to transform the UK into a global hub for cryptoasset technology and investment.
Other measures include collaboration with the Royal Mint on an NFT, establishing a statutory “financial market infrastructure sandbox” to help businesses innovate, an FCA-led “CryptoSprint,” and the creation of an engagement group to work more closely with the industry.
Financial services in the UK remain at the forefront
The initiatives aim to attract jobs and investment while offering consumers more choice. They also include exploring ways to make the UK tax system more competitive, encouraging further market development for cryptoassets.
Chancellor of the Exchequer Rishi Sunak commented:
My ambition is to make the UK a global hub for cryptoasset technology, and the measures we have set out today will help ensure firms can invest, innovate and scale up here. We want to see tomorrow’s businesses — and the jobs they create — based in the UK, and by regulating effectively we can give them the confidence they need to think and invest for the long term. This is part of our plan to ensure the UK’s financial sector remains at the cutting edge of technology and innovation.
Enabling stablecoin issuers to operate and invest
The government will bring stablecoins within the scope of payment regulation, enabling token issuers and service providers to operate and invest in the UK.
It also announced plans to review DeFi lending, where holders of cryptoassets lend them out to earn a return. These lending arrangements will receive special consideration for tax treatment.
In addition, the government will take steps to extend the scope of the investment manager exemption to cover cryptoassets. Mr Sunak has tasked the Royal Mint with producing a non-fungible token this summer.