On July 20, 2022, the Financial Services and Markets Bill, showcasing the government’s vision for the financial services sector, was introduced to the United Kingdom Parliament
Stablecoin Adoption Bill
Her Majesty’s Treasury (HM Treasury), released the announcement of the introduction of the Bill and shared its role as iterated in the new Chancellor’s speech.
Speaking at the Treasury’s Financial and Professional Services Dinner on July 19, 2022, the Chancellor of the Exchequer, Nadhim Zahawi, expressed that the Bill is to deliver the government’s vision of an “open, green, and technologically advanced financial services sector that is globally competitive.” The Bill is also expected to take advantage of the country’s exit from the European Union and tailor regulations for the UK markets.
The goal of the new Bill also includes maintaining the UK’s position as an open and global financial hub and implementing the outcomes of the Future Regulatory Framework (FRF) Review. The consultation for the review ran from 9 am on November 9, 2021, to 11:45 pm on February 9, 2022, and aimed to set out the government’s proposal for adapting the UK regulatory framework for financial services to maintain future relevance.
Stablecoins are Important
The Bill, which, according to the Chancellor’s first speech following his new appointment, “reinforces the UK’s position as a leading center for technology as we safely adopt crypto assets,” has been a long-awaited one, as it contains rules for the use of stablecoins as a payment means in the UK. The rules are expected to clarify some gray areas in the existing financial regulations.
Following the words of the Economic Secretary to the Treasury and City Manager, John Glen MP, in April, during the UK FINTECH WEEK of 2022, the government is taking steps to position the UK as a global hub in the crypto asset section of fintech. Glen shared the government’s plan to introduce legislation as part of an ambition to deliver a world-leading regulatory regime for stablecoins, saying that “this will enable consumers to use stablecoins as payment services with confidence.”
While the so-called stablecoins are designed to maintain a steady value, their stability has sometimes been questioned. This questioned stability, however, has not slowed down the launch of new stablecoins. As digital currencies backed by traditional stable fiat currencies, stablecoins have gained popularity in the crypto space as they provide a good range of use cases.
The UK’s dream of becoming a global hub for crypto assets is evidently backed by some real action. Aside from the FRF Review, another method the country has searched for better options regarding regulation is the call for evidence. In this call, the UK sought input on taxing crypto asset loans and staking in DeFi.
Believed to be lagging far behind the rest of the markets on matters of virtual currency legislation, the changing economic times seemed to have forced the UK to alertness and activity, keeping up with emerging technologies. The unfolding strategies might just be what puts the United Kingdom on the crypto map, with the new Bill, hopefully, clearing up the murky waters of security and regulatory concerns hindering better bitcoin (BTC) adoption in the country.