UK Recognises Stablecoins as Valid Payment Form; Chancellor Rishi Sunak Orders Official, Tradeable NFTs

UK is bringing stablecoins under regulation in order to make way for them to be used as a payment option.

By Radhika Parashar | Updated: 5 April 2022 11:02 IST

UK Recognises Stablecoins as Valid Payment Form; Chancellor Rishi Sunak Orders Official, Tradeable NFTs

Photo Credit: Pixabay/ Butti_s

The British government had launched a consultation on crypto assets and stablecoins last year

Highlights

The Royal Mint will make UK’s official NFTs
Stablecoins will be brought within UK’s payments regulatory perimeter
UK has decided to host a ‘CryptoSprint’ event with crypto experts in May

UK has released a set of groundbreaking guidelines, defining the crypto sector that seems to be thriving among its citizens. Stablecoins have been recognised as an official mode of payment in the UK as part of its fresh announcements. Stablecoins, like Tether and Binance USD, are crypto assets pegged to reserve assets like gold or fiat currencies. So, even if the crypto market is down, they can still see gains due to the performance of its underlaying asset.

The British government had launched a consultation on crypto assets and stablecoins last year, the outcomes of which were announced at the Global Finance Summit by UK's Economic Secretary, John Glen.

“The government intends to legislate to bring stablecoins — where used as a means of payment — within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK,” an official blog post said.

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Economic Secretary @JohnGlenUK announced today that stablecoins will be brought into UK payments regulation.

This places the UK financial services sector at the forefront of technology, creating conditions for stablecoin issuers and service providers to operate and invest. pic.twitter.com/14SsIGW5bf
— HM Treasury (@hmtreasury) April 4, 2022

We have set out new legislation to see stablecoins recognised as a valid form of payment in the UK.

By recognising the potential of this technology and regulating it, we can ensure financial stability and provide wider consumer payment choice. https://t.co/MdZ5IOLZtH pic.twitter.com/KfI9es9S6m
— Rishi Sunak (@RishiSunak) April 4, 2022

British Chancellor of the Exchequer Rishi Sunak has ordered the creation of tradeable, government-backed NFTs as part of his plans of transforming UK into a global crypto hub. Sunak has ordered the Royal Mint to produce these blockchain-based digital collectibles.

The Royal Mint produces coins for the UK and is wholly owned by Her Majesty's Treasury.

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“[We are] working with the Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the forward-looking approach the UK is determined to take,” Sunak said. “It's my ambition to make the UK a global hub for crypto asset technology, and the measures we've outlined today will help to ensure firms can invest, innovate and scale up in this country.”

Chancellor @RishiSunak has asked @RoyalMintUK to create an NFT to be issued by the summer.

This decision shows the the forward-looking approach we are determined to take towards cryptoassets in the UK. pic.twitter.com/cd0tiailBK
— HM Treasury (@hmtreasury) April 4, 2022

The British government is looking to establish a financial market infrastructure (FMI) called the 'Sandbox' that will enable firms to experiment and innovate in providing the infrastructure around crypto services.

New legislation announced today will allow us to deliver a Financial Market Infrastructure Sandbox by 2023.

This will enable firms to explore the potentially transformative benefits of the distributed ledger technology that underpins financial markets. pic.twitter.com/tSlmwwaLvo
— HM Treasury (@hmtreasury) April 4, 2022

In a bid to stir discussions on crypto assets, UK has decided to host a ‘CryptoSprint' event with industry participants. The two-day conference will bring together crypto insiders to provide insights on the future crypto asset regime.

“The Economic Secretary will establish and chair a Crypto asset Engagement Group, convening key figures from the regulatory authorities and industry to advise the government on issues facing the crypto asset sector,” the blog post noted.

UK's financial watchdogs have constantly expressed concerns about the economic instability that may seep in as an aftermath of UK's mass exposure to cryptocurrency.

Previously, the Bank of England (BoE) requested that special heed should be paid on trimming down risks of crypto misuse for financial distortion, money laundering, and other illicit activities that these decentralised and mostly untraceable virtual assets are capable of facilitating.

As of now, the BoE has no plans of releasing a central bank digital currency (CBDC) anytime soon, it had said earlier.

Industry experts, however, are elated to see the UK supporting the crypto sector as opposed to banning it.

“Despite previously having a strict stance on crypto assets, the UK government has taken a surprising turn. With goals to strengthen regulatory scrutiny of digital assets, the UK has also set out several steps including exploring the application of blockchain and regulating trade in cryptocurrencies. The backing and reassurance from economic powerhouses such as the UK will strengthen the legitimacy and investor confidence in crypto assets,” the research team at CoinDCX told Gadgets 360.

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Further reading: UK, Rishi Sunak, NFT, Non Fungible Tokens, Cryptocurrency

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More