The U.K. has unveiled the plans to regulate some cryptocurrencies as a part of a broader plan to become a global hub for digital assets as Europe and the U.S. race towards it.
Undeniably, cryptocurrencies have exploded in popularity, leading officials to contemplate their risks and financial stability. “The U.K. is open for business – open for crypto businesses,” John Glen, the Economic Secretary to the Treasury, said in a speech on Monday.
He further continued as the Treasury chief Rishi Sunak has asked the Royal Mint to create a digital collectable known as an NFT as an “emblem of the forward-looking approach the U.K. is determined to take.”
Stable coins to carry forth the cryptocurrency baton in the U.K.
In the previous month, the United States has been working on releasing drafts for cryptocurrency regulation, while the European Union lawmakers are drafting rules for monitoring and controlling crypto assets.
Glen further said that the government plans to update laws for a cryptocurrency called stable coins. This will encourage issuers and buyers to operate and grow the cryptocurrency in the U.K. Stable coins have their value tied to gold, making them less volatile than the other cryptocurrencies in the world like bitcoin, which can quickly depreciate.
“This will also enable consumers to use stable coin payment services with confidence,” Glen said, without specifying which stable coins would be regulated. Investors use stable coins to pay fees on cryptocurrency trading exchanges or send money. Currently, there are more than 200 stable coins, the biggest ones being Tether and USD coins.
Crypto technology to be used while issuing government debt
The U.K. also plans on exploring the idea of using cryptocurrency technology in government debt. In fact, the Treasury Chief, Rishi Sunak, has commissioned the Royal Mint to create a non-fungible token or an NFT by this summer. NFT is similar to blockchain technology and employs encryption technology that results in artworks or sports memorabilia, which is then sold for millions.
Glen said that the government is now looking at “regulating a broader set of crypto activities, including trading of tokens like bitcoin,” with a consultation expected later this year.
