UK defines a new plan as it seeks to become a global crypto hub
- The UK will legalise the use of stablecoins to settle payments
- The government is also embracing NFTs, with plans to mint one this summer
- The Treasury Economic Secretary John Glen insisted on the need to adopt dynamic regulations
The UK has shared a new plan with a series of measures toward becoming a global hub for crypto-asset technology. As per a statement published yesterday, the Chancellor of the Exchequer Rishi Sunak noted that the measures would empower firms to invest, scale and establish innovative projects in the country.
“We want to see the 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,” he noted.
Stablecoins as a payment option
At the top of the package of measures would be establishing regulations to recognise stablecoins as valid instruments for completing payments. The regulations would also mean that stablecoin service providers would be incentivised to invest and conduct operations in the UK.
Economic Secretary to the Treasury John Glen said in an address at the Innovate Finance Global Summit that the regulation would also mean bringing stablecoins under the umbrella of existing payment guidelines. The Bank of England (BoE) would be tasked with regulating these “systemic” stablecoins, and the technique would be one to assure convertibility between a fiat standard and the digital token.
For the larger cryptocurrency space, Glen said consultation on regulation would be coming sometime later this year.
Glen also set forth that the approach adopted in regulating should be dynamic like computer code rather than rigid. Flexibility would allow laws to be edited when the need arises. In addition, the Economic Secretary also noted that for establishing a tax regime, the current tax code would not require any major changes and should work just fine.
As far as decentralisation goes, the UK also plans to modify how DeFi loans and staking are handled for tax purposes and also grant decentralised autonomous organisations (DAOs) legal status.
The report also noted that the Chancellor had directed the Royal Mint to mint an NFT, which should come this summer, and revealed a Cryptoasset Engagement Group had been commissioned to include regulatory figures and industry experts. The Economic Secretary would lead the group in an advisory role to the government on the crypto space.