The UK government announced plans to begin regulating stablecoins, paving their way for use as a recognised form of payment in the country. This is part of a series of measures to transform the country into a global hub for crypto asset technology and investment.
Other measures include working with the Royal Mint on an NFT, legislating for a ‘financial market infrastructure sandbox’ to help firms innovate, an FCA-led ‘CryptoSprint’, and an engagement group to work more closely with industry.
UK financial services remain at cutting edge
The measures are aimed to attracting jobs and investment and giving consumers more choices. They also include exploring ways to render the UK tax system more competitive. This will encourage further crypto asset market development.
Rishi Sunak, Chancellor of the Exchequer commented:
It’s my ambition to make the UK a global hub for crypto asset technology, and the measures we’ve outlined today 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. This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.
Allowing stablecoin issuers to operate and invest
The government will bring stablecoins within the payments regulatory perimeter, making it possible for token issuers and service providers to work and invest in the UK.
They also announced plans to review DeFi loans, where holders of crypto assets lend these out for profit. These loans will undergo special treatment for tax purposes.
In addition, the government will take steps to broaden the scope of the Investment Manager Exemption to include crypto assets. Mr. Sunak has commissioned the Royal Mint to create a Non-Fungible Token this summer.