The U.K. is now validating stablecoins as an accepted form of payment and is moving forward to launch an international hub for crypto-asset technology and investment, according to a statement from the HM Treasury of the U.K. government.
Stablecoins will be brought within a regulatory framework, paving their way for use in the U.K. as a recognized form of payment.
“It’s my ambition to make the U.K. a global hub for cryptoasset 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 U.K., and by regulating effectively we can give them the confidence they need to think and invest long-term,” said Rishi Sunak, Chancellor of the Exchequer.
Sunak added that the move is part of the agency’s plan to make sure that the U.K. is “always at the forefront of technology and innovation” when it comes to the financial services sector.
Stablecoins are cryptocurrencies that rely on stable assets for value and are usually pegged to fiat money or exchange-traded commodities. The right regulation is expected to provide a more efficient means of payment and widen consumer choice.
The U.K. government intends to bring stablecoins as a payment form within the payments regulatory perimeter and create conditions where stablecoins issuers and service providers can operate and invest in the region.
“By recognizing the potential of this technology and regulating it now, the government can ensure financial stability and high regulatory standards so that these new technologies can ultimately be used both reliably and safely,” according to the statement.
Economic Secretary to the Treasury John Glen outlined the U.K.’s plans in a speech earlier this week at the Innovate Finance Global Summit. The plans also include the exploration of implementing distributed ledger technology (DLT) in U.K. financial markets, which would enable decentralized data sharing.
Glen also said that the government is planning a consultation regarding the wider regulation of the crypto asset sector later this year.