UK Treasury Calls for Feedback on Approach to Cryptocurrency and Stablecoin Regulation

  • The United Kingdom Treasury has called for public feedback on its approach to Cryptocurrency and stablecoins
  • The consultation was set up to get information on better ways to regulate the industry
  • The U.K. is looking to harness the benefits of the growing crypto industry with its new regulations

Following Brexit, the finance ministry of the United Kingdom has turned its attention towards regulating cryptocurrencies. The intentions remain to improve safety for consumers and reduce potential risks of crypto exposure plaguing countries in the east.

The U.K. Joins a List of Countries Seeking to Approve the Use of Stablecoins

The United Kingdom has joined the list of Governments across the world seeking to regulate and approve the use of Stablecoins on their shores.

On the 4th of January, the office of the Comptroller of the Currency (OCC) announced that federal banks in the United States could begin to use stablecoins to perform basic payment transactions.

A week ago, Her Majesty’s Treasury, UK’s finance department announced its intentions to probe the crypto industries in a bid to regulate and profer better services to users and firms providing crypto-related services.

The finance department proposes that all British firms marketing digital assets must ger a new U.K. registration. In addition, the regulatory body has laid out its legal definition of stablecoins and the requirements crypto firms must meet to operate them in the country.

In a bid to strengthen the consumer communication and anti-money laundering (AML) regulation of its crypto sector, the U.K. treasury published an open consultation. The Financial department Tweeted.

The government invites views from a wide range of stakeholders, and particularly firms engaged in crypto-asset activities.

The announcement was made just days after the United Kingdom and the European Union marked its last day of freedom to work; December 31, 2020.

On the Flipside

  • Other countries around the world have taken a rather different direction towards regulating cryptocurrencies.
  • The United States Financial Crime Enforcement Network (FinCEN), has proposed that crypto exchanges collect a lot more data about individuals transferring more than $3,000 in cryptocurrencies into private wallets.
  • There have been over 65,000 commenters since the proposed rules were announced, with the entire population kicking against the move.
  • New Zealand’s financial watchdog for example has warned crypto investors of the potential of losing their Investments. The warning came just after Bitcoin’s massive drop.

The Goal of the Inquest

According to the official release from the U.K. treasury, it is trying to build a regulatory framework that is equipped to harness the benefits of new technologies, supporting innovation and competition.

The regulatory body decides to take this route given the recent growth of the industry. According to the Treasury regulating the sector would help it create better financial safety and reduce the risks consumers are exposed to.

Rather than impose regulations on the crypto industry, the United Kingdom is seeking to use consultations to draw a clear picture of the nation’s crypto space. In the end, it would publish a list of rules the industry should follow to legally operate within its borders.

John Glen, Economic Secretary to the Treasury, has encouraged startups and investors to weigh in on the regulations. The Treasury stated that it will continue to accept responses to the consultation paper until March 21, 2021.

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