UK Government Announces Its Plan to Adopt Stablecoins as Legal Tender

Vignesh Karunanidhi
UK Crypto
Source: Pixabay

The UK’s Economic and Finance Ministry has stated that it plans to change its current legislative framework to include stablecoins as a payment method.

HM Treasury issued a Consultation and Called for Evidence in January 2021 about the regulatory approach to crypto-assets and stablecoins.

It mainly stated certain crypto assets and distributed ledger technology (DLT) and how they might create revolutionary changes in financial markets and provide consumers with new methods to interact and invest.

They also spoke about how they could pose threats to consumers, market integrity, and financial system stability.

The government’s consultation requested input on how the UK can guarantee that its regulatory structure is capable of capturing such advantages while also reducing possible hazards.

UK wants to be at the forefront

The government recommended a graduated and appropriate approach to crypto asset regulation as part of its consultation. It also wanted to be attentive to risks and responsive to new developments in the market.

The government confirms its intention to take the necessary legislative steps to bring activities that issue or facilitate the use of stablecoins as a form of payment.

It will be carried out within the UK regulatory perimeter, primarily through amendments to existing electronic money and payments legislation.

The reasoning for this is that some stablecoins have the potential to become a widely used payment method, particularly among retail consumers, hence increasing consumer choice and efficiency.

The government also aims to consult on regulating a broader set of crypto-asset operations later this year.

“If crypto technologies are going to be a big part of the future, then we, the UK, 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 crypto-assets into the scope of financial promotions regulation.”