UK Department of Finance draws up regulations for stablecoins

UK revealed it is working on regulations for stablecoins while conducting research on digital coins

Yesterday, Chancellor of the Exchequer Rishi Sunak announced that there will be future regulatory proposals for stablecoins. Sunak also mentioned that the department was exploring digital currencies.

One section of the announcement said: „New technologies like stablecoins – privately issued digital coins – can transform the way people store and exchange their money, making payments cheaper and faster.

The announcement also highlighted the Treasury’s Bitcoin Code plan to enact a green taxonomy – a move that will help establish the UK’s position in green finance.

„The UK will also implement a green taxonomy – a common framework for determining which activities can be defined as environmentally sustainable – which will improve understanding of the impact of business activities and investments on the environment and support our transition to a sustainable economy.

Sunak anticipates that the financial services sector will lead the country in the right direction with respect to CBDCs and stablecoins.

„We are beginning a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre. By taking as many equivalence decisions as we can in the absence of EU clarity, we are doing what is right for the UK and giving businesses certainty and stability,“ he said.

The details of the regulations are not clear at the moment. However, stablecoin initiatives are expected to meet the same standards as those applicable to entities operating with other payment methods.

The news also revealed that the central bank of England, together with the Treasury, was looking for a digital currency option. Chancellor Sunak talked a lot about the work of the two bodies.

Sunak posted on Twitter, saying: „We will publish a consultation to ensure that the new privately issued currencies, stablecoins, meet the high standards we expect from other payment methods. And @bankofengland & Treasury are considering whether central banks can issue their own digital coins, as a complement to cash“.