The UK has revealed that it is working on regulations for stablecoins as it pursues research on digital currencies
Yesterday, the Chancellor of the Exchequer Rishi Sunak announced that there will be forthcoming regulatory proposals for stablecoins. Sunak also mentioned that the department was exploring digital currencies.
A section of the announcement read, “New technologies such as stablecoins – privately-issued digital currencies – could transform the way people store and exchange their money, making payments cheaper and faster.”
The announcement also highlighted the Treasury’s plan to enact a green taxonomy — a move that will help establish the UK’s position in the green finance sector.
“The UK will also implement a green taxonomy – a common framework for determining which activities can be defined as environmentally sustainable – which will improve understanding of the impact of firms’ activities and investments on the environment and support our transition to a sustainable economy.”
Sunak anticipates that the financial services sector will steer the country in the right direction vis-à-vis CBDCs and stablecoins.
“We are 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.,” the chancellor asserted.
Specifics around the regulations are not clear at the moment. However, it is expected that stablecoin initiatives will comply with the same standards applicable to entities operating with other payment methods.
The news further revealed that the central bank of England, in conjunction with the Treasury, was looking into a digital currency option. Chancellor Sunak spoke highly about work from the two bodies.
Sunak posted on Twitter, saying, “We’ll publish a consultation to ensure new privately-issued currencies, stablecoins, meet the high standards we expect of other payment methods. And the @bankofengland & Treasury are considering if central banks can issue their own digital currencies, as a complement to cash.”