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UK To Regulate Stablecoins As the Treasury Introduces New Financial Bill

·2 min read

Key Insights:

  • The new bill has been introduced to the Lower house of Parliament.

  • Stablecoins used as means of payment might be subjected to regulations.

  • Just a few months ago, the UK declared its aim of becoming a global “crypto hub”.

The changing market of cryptocurrencies and the rising demand for the same has resulted in many countries taking a second look at their policies.

While some are reverting to ignoring the prospect of advancement in finance out of sheer lack of awareness like India, others are changing their decision to be more in favor of adopting new technologies, such as the UK.

UK Treasury Presents a New Bill

The new Chancellor of the Exchequer, Nadhim Zahawi, i.e., Treasury Minister, presented a new bill to the Parliament titled the ‘Financial Services and Markets Bill’, which will be bringing some changes to the current status of cryptocurrency operations in the country.

Among the many suggestions, the ones that stood out are the focus of the Treasury on stablecoins and the functioning of the country’s regulators.

Firstly the bill seeks to regulate a set of stablecoins [Tether (USDT), USD Coin (USDC), etc.] that are in use as a means of payment at the moment.

Additionally, the bill will also provide the Bank of England with powers to limit the Financial Conduct Authority (FCA) in its approach towards regulating payments systems using digital settlement assets should any of their regulatory action impact the business in the country and/or result in financial instability.

Calling it a “landmark day” for financial services in the United Kingdom, the Chancellor said,

“Through the introduction of this Bill, we are repealing hundreds of pieces of burdensome EU regulations and seizing on the benefits of Brexit to ensure the financial sector works in the interests of British people and businesses.”

The UK Builds on Its Aim

Back in April, the preceding Chancellor of the Exchequer, Rishi Sunak, had stated that he intends to make the UK a global hub for crypto technology, and Zahawi will potentially continue making that happen with the new bill.

As reported by FXEmpire, Sunak had announced that the Finance Ministry would create legislation to bring stablecoins into the regulatory perimeter, and the current Chancellor aims to do precisely that with the Financial Services and Markets Bill.

Provided the bill has only been in its second reading in the House of Commons, it might note some changes as it goes through the different rounds before receiving Royal Assent.

This article was originally posted on FX Empire