The UK Government has taken a step closer to mainstreaming cryptocurrencies by announcing plans to allow so-called stablecoins to be used as payment within the country.
Plans to Incorporate Payments in Stablecoins
The Economic and Finance Ministry of the United Kingdom has stated that it aims to change its present regulatory framework to accommodate stablecoins to be utilized as a means of payment.
HM Treasury announced Monday that certain stablecoins could potentially become “a widespread means of payment” for retail clients in the United Kingdom following a consultation with various organizations, universities, and individuals conducted beginning in January 2021.
The UK government stated that it would “take the necessary legislative steps” to incorporate stablecoins into its regulatory framework, “primarily through amendments to existing electronic money and payments legislation.”
The finance ministry stated that modifying its legislative framework to incorporate stablecoins as a payment method is simply one element of a “package of measures” to integrate crypto assets and blockchain technology into the United Kingdom.
Development of Crypto-Friendly Taxes
Additionally, the government organization announced the establishment of a Cryptoasset Engagement Group “to work more closely with the industry” to examine how the country’s tax system may promote development in the crypto market. It will promote building a ‘financial market infrastructure sandbox’ for emerging businesses and launching a nonfungible token issued by the Royal Mint in the summer of 2022.
John Glen, the Treasury’s Economic Secretary, stated that the government would examine how crypto
loans may be classified in the country’s tax system and consult to determine whether overseas investors may be excluded from UK taxes for crypto transactions undertaken on their behalf under the Investment Manager Exemption. He will chair and develop the Cryptoasset Engagement Group, which will meet with industry and regulatory leaders to advise the UK government.
A Global Hub for Crypto
“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,” said Rishi Sunak, chancellor of the Exchequer. “This is part of our plan to ensure the U.K. financial services industry is always at the forefront of technology and innovation.”
In light of the market’s expansion and adoption, the response to the survey indicated that the UK intends to study regulating “a broader range of cryptoasset activities. Additionally, the country’s financial watchdog, the Financial Conduct Authority, or FCA, announced that it would host a ‘CryptoSprint’ event in May to solicit input from industry participants on how the United Kingdom’s regulatory framework for crypto could be further improved.
“If crypto technologies are going to be a big part of the future, then we, the U.K., want to be in — and in on the ground floor,” said Glen at the Innovate Finance Global Summit on Monday. “In this country, we’ve already said that we’ll seek to protect consumers by legislating to bring certain cryptoassets into the scope of financial promotions regulation.”