Britain has unveiled plans to regulate some cryptocurrencies as part of a broader plan to become a global hub for digital payments, as authorities in the United States and Europe race to set rules for cryptocurrency.
Cryptocurrencies have become so popular that officials around the world are scrambling to figure out how to regulate them amid concerns that they could threaten financial stability and hurt consumers.
John Glenn, Chancellor of the Exchequer, Economics, said in a speech on Monday that the UK is open to open business for crypto companies.
Treasurer Rishi Sunak has also asked the Royal Mint to create a digital group known as NFT as a symbol of the forward-looking approach the UK intends to take.”
Cryptocurrency proponents say the technology will make payments faster, easier and more transparent, while skeptics fear it could be used for illegal activities such as money laundering and contributing to carbon emissions due to the heavy computing power needed to process transactions.
Last month, the US beefed up government oversight of cryptocurrencies while EU lawmakers approved draft rules for crypto-asset groups.
Glenn said the government plans to update laws on payments to include a typo in a cryptocurrency called stablecoins to encourage issuers and service providers to operate and grow in UK stablecoins, which are usually pegged to the dollar or a commodity like gold, making them much less volatile than Regular cryptocurrencies like Bitcoin, which can fluctuate wildly in value.
This will also enable consumers to use stablecoin payment services with confidence, without specifying which stablecoins will be regulated, Glenn said.
There are more than 200 stablecoins, and two of the largest are Tether and USD Coin. Stablecoins are often used to pay fees on cryptocurrency exchanges or send cross-border payments.
Sunak has commissioned the Royal Mint to create a non-fungible token, or NFT, by summer. NFTs use a version of a cryptographic technology known as blockchain to create unique digital objects such as artwork or sports memorabilia, which sometimes sell for millions of dollars.
There are also plans to explore the idea of using encryption technology to issue British government debt.
Glenn said the government is now looking at regulating a broader range of crypto activities including trading tokens such as bitcoin,” and a consultation is expected later this year.
(The title and image for this report may have been reformulated only by the Business Standard staff; the rest of the content is automatically generated from a shared feed.)