UK authorities working on stablecoin regulatory framework

UK authorities working on stablecoin regulatory framework

By Benson Toti - min read

The United Kingdom’s government is currently making way for their plans to turn the nation’s economic state into a more solid melting pot for new upcoming businesses. According to a statement made on the 9th of November—the government also intends for the plan to coincide with whatever regulations are needed for central bank digital currencies (CBDCs). 

At the confirmation of the European Union’s (EU) exit, the United Kingdom’s government has undertaken actions to create the plans for establishing a new wave of their economy and its ecosystem, to make way for a more efficient, varying and competitive marketplace. Cohering with the United Kingdom’s statement on the 9th of November in regards to their Financial Services, the UK plans on staying as the leader for any technological and financial innovations. This is again in terms of creating regulatory frameworks for the issuance of stablecoin and the mitigation of any risks when it comes to their users, all the while keeping the program stable and secured with the guidelines and policies.

The chancellor of the Exchequer, Rishi Sunak, stated that the UK is “starting a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre. By taking as many equivalence decisions as we can in the absence of clarity from the EU, we’re doing what’s right for the UK and providing firms with certainty and stability”.

It has been also said that Runak has decided that the government should do whatever they can with their capabilities to guarantee the “nation moves forward as a transparent, attractive and well-regulated market, and lead the world in pioneering innovative technologies”.

However, the variance of the solution of payments (just like the Faster Payments Service or FPS), is designed to be able to quickly track any payments done within the confines of the UK’s banking regions. This makes authorities think that stablecoins are a privacy-based form of currency that could become the uprising of the way “people store and exchange their money, making payments cheaper and faster”.

It is also worth considering that research has been carried out by the Bank of England (BOE), measuring the issue for having its own CBDC for a while now and that Chancellor Rishi Sunak has confided in the BOE and the HM Treasury for their efforts and reliability.

As of today, CBDCs are considered to be among the more popular matters that have affected a variety of banks around the world, with China leading the CBDC race with its digital yuan, referred to as DCEP, that has recently processed transactions worth 2 billion yuan ($300 million).