Earlier this month, some really exciting news broke, which is huge for the world of crypto and shows that things really are moving forward and crypto is here to stay.
While the naysayer’s felt cryptocurrencies were just a phase, this latest news shows it’s not a phase and something that you need to pay attention to.
On 20th July 2022, Nadhim Zahawi, UK Finance Minister, announced support for using stablecoins for making payments. This has come under the long-awaited Financial Services and Market Bill. It is thought that Financial Services and Market Bill will help the UK create a more competitive financial services sector, post Brexit.
It is believed by UK Finance members that crypto assets and stablecoins present huge potential when it comes to transforming the financial landscape and position of the UK as a leader in digital finance. UK Finance Minister, Nadhim Zahawi, said that consumers will remain protected. There will be legislation in place that ensures victims of scams can be fully compensated. The legislation will also act to protect access to cash for the millions of people that rely on it.
The long-awaited Financial Services and Market Bill will set standards for utilising stablecoins for payments. This is done as the popularity of crypto adoption rises in retail and across other businesses. The bill will present a road map on the adoption of stablecoins. It is thought that this will help drive crypto adoption even further in the UK.
The stablecoin regulation covers consumer protections, marketing rules and decisions regarding amendments to existing electronic money laws. Another big step forward is that crypto companies, including those stablecoin issuers and custody service providers will need to register with the FCA, the Financial Conduct Authority.
The members of the UK Finance Ministry believe that stablecoins offer opportunities to transform the financial markets. They believe stablecoins help financial markets become more agile and competitive too. Through delivering innovate products and increasing operations efficiencies and reducing risk, the UK is making adoption of cryptocurrencies more possible for everyone.
The UK had previously expressed at interest in turning the UK into a global crypto hub. However, it will be interesting to see what the resignation of the crypto-friendly finance minister Rishi Sunak and his aim for Prime Minister could bring for this goal. The Senior Treasury official Jon Glen impacted on these plans too, but again now he has resigned it could be interesting to see what happens news. Rishi Sunak had promised to make stablecoins a means of payment – how could this move forward in the future if he was Prime Minister?
Explaining the new bill during his first speech as the newly appointed finance minister Nadhim Zahawi said that the framework of the bill will help to reinforce the UKs position as a leading centre for technology as we safely adopt crypto assets and move forward in the crypto world.
What Are Stablecoins?
Stablecoins are a type of cryptocoin. They attempt to peg their market value to some external reference. As a medium of exchange, it is thought that stablecoins are more useful than other more volatile crypto coins. Stablecoins may be pegged to a currency like the US dollar or to the price of a commodity like gold for example.
The UK’s Competitiveness In The Crypto Market
The UK has been lagging behind other countries with regards to crypto regulations and adoption for some time. However, the strict stance might change with the stablecoin regulation as plans are put forward for further crypto adoption.
The British government recently had called for a consultation on the DeFi taxation. It is important that legislators need to support stablecoins, at least for following the transactions for taxation purposes.
This could be the sign of huge things to come in the world of crypto. If you have been considering a crypto investment, then now could be the time to get on board.