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UK to Regulate Stablecoins and Become Global Crypto Hub

The UK Government has revealed a list of upcoming measures it will take to make the country a global crypto hub.

The Government of the United Kingdom (UK) has set out its plan to regulate crypto.

On Monday, the Government announced its plans of doing making the UK a global hub for crypto technology and investment. That’s why it announced some upcoming measures which are discussed below.

The Government will recognise stablecoins as a valid form of payment. They will be brought under regulation paving way for their use as means of payment.

A ‘Financial Market Infrastructure Sandbox’ (FMI Sandbox) is expected to be legislated upon. It will help firms innovate products and services that underpin the market.

An FCA-led event called ‘CryptoSprint’ will be organized in May. It will be a 2-day event where the views of the industry will be sought on the development of a future cryptoasset regime.

Furthermore, a ‘Cryptoasset Engagement Group’ will be established to work more closely with the industry. It will consist of key figures from the regulatory authorities and industry who will advise the Government on issues facing the cryptoasset sector.

Back here in India, the Government is taking a tough stand against crypto by raising the taxes and disallowing any setoffs. In the UK, it has been proposed to explore ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market.

The UK Government also said that the Royal Mint will work on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take.

Chancellor Rishi Sunak said:

“We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.”

Chancellor Rishi Sunak

In December, the Bank of England’s Deputy Governor revealed that while only about 0.1% of UK wealth was currently held as digital assets, that proportion was growing quickly. India ranks 2nd in the Chainalysis Global Crypto Adoption Index 2021 whereas, the UK ranks 21st. In the Global DeFi Adoption Index India 2021 ranks, 6th and the UK ranks 5th.

Considering this, India should also accept crypto innovation and harness the prowess of its famed Information Technology (IT) talent. The crypto tax regime has kickstarted an emigration wave among crypto entrepreneurs who are moving or planning to move to countries with favourable regulations.

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