The United Kingdom has declared its plan to lay out policies on stablecoins and also research on Central bank digital currencies (CBDCs). The UK Treasury Department has disclosed it is drafting policies to control private Stablecoins while continuing research on CBDC as a substitute to cash.
On November 9, an announcement was made by Rishi Sunak, the UK Treasury Chancellor. He stated the upcoming regulatory policies including other targets for the UK’s financial services industry, with an evaluation of the U.K’s listings procedure and assisting green finance.
“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 news appeared in the middle of conclusive negotiations betwixt the European Union and the U.K.for post-Brexit trade agreement. Chancellor Sunak stated he desires that U.K’s financial services department will accompany “the global conversation on new technologies like stablecoins and central bank digital currencies”, he further stated,
“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 center. […] Our plans will ensure the UK moves forward as an open, attractive, and well-regulated market.”Rishi Sunak
Regulations to correspond with existing methods
Although the specifics are limited, the announcement affirms that the drafted regulations will need stablecoin policies to follow the corresponding minimal criteria as the organizations function with other existing payment methods.
The document additionally discloses that England’s treasure and central bank are presently exploring a CBDC, including the Chancellor encouraging acts of the two sectors into “whether and how central banks can issue their own digital currencies as a complement to cash.”
When in June 2019, Facebook had declared its proposition to launch a virtual currency Libra, the regulatory repercussions of stablecoins had turned into an important discussion topic.
Since then, the lawmakers of Europe have constantly demanded stern and comprehensive regulatory policies prior to authorizing private stablecoins to be established in their jurisdictions, highlighting issues relating to the protection of consumers and monetary sovereignty.
In divergence, the UK Treasury’s Chancellor apparently has formed a much more practical evaluation of the rapidly increasing stablecoin market, observing that stablecoins policies will experience the same supervision as already existing payment entities.