The UK government on Tuesday disclosed a broad strategy to harness the power of crypto assets and blockchain technology to facilitate payments. The Financial Services Minister, John Glen, stated in an official statement that Britain will pass a legislation soon to bring some stablecoins under the regulatory framework, such as complying with existing payment rules.
Dubai and Singapore are two countries that have already taken steps to bring cryptocurrencies under regulations.
The UK Chancellor of the Exchequer, Rishi Sunak, said, “It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.” He further noted that the government wants to nurture the businesses of tomorrow and the jobs they can create in the UK by regulating effectively. “We can give them the confidence they need to think and invest long-term. This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation,” he said.
The UK government’s strategy involves having a financial market infrastructure sandbox to assist firms in innovation, a ‘CryptoSprint’ led by the UK Financial Conduct Authority, partnering with the Royal Mint on a non-fungible token (NFT), and forming an engagement group that will work closely with industry.
Earlier, several UK politicians, especially Conservative Members of Parliament, had taken a negative stance on cryptocurrencies and other virtual digital assets. But that has changed. John Glen, a British Conservative Party politician stated that the UK will explore the transformative benefits of Distributed Ledger Technology in its financial markets. “The technology allows data to be synchronised and shared in a decentralised manner, potentially resulting in increased efficiency, transparency, and resilience,” he said.
The UK government may also soon mint its first NFT. Speaking about the Royal Mint coming up with an NFT, he said, “This decision shows the forward-looking approach we are determined to take towards crypto assets in the UK.”
The country also plans to explore the possibility of using blockchain to issue government bonds or gilts. The disincentives for fund managers who include crypto assets in their portfolios may be reduced.