The UK government has unveiled its plans to make the country a global centre for cryptoasset technology.
The UK’s vision was set out by John Glen, the Economic Secretary to the Treasury at the Innovate Finance Global Summit last week.
The vision will see stablecoins to be brought within regulation, which will help pave the way for their use in the UK as a recognised form of payment. The government claimed that by recognising the potential of this technology and regulating it now, the government ‘can ensure financial stability and high regulatory standards so that these new technologies can ultimately be used both reliably and safely’.
There are also plans for the UK to explore the benefits of Distributed Ledger Technology in UK financial markets, which can enable data to be synchronised and shared in a decentralised way to potential achieve greater efficiency, transparency and resilience.
The government will also legislate to create a financial market infrastructure Sandbox to enable companies to experiement and innovate in providing the infrastructure services that underpin markets.
Other measures include exploring ways to enhance the competiveness of the UK tax system to encourage further development of the cryptoasset market in the UK. For example, it will review how DeFi loans are treated for tax purposes. In addition, the government will consult on extending the scope of the Investment Management Exemption to include cryptoassets.
Rishi Sunak – the UK Chancellor of the Exchequer – also has commissioned the Royal Mint to create a Non-Fungible Token this summer. There is also plans for the Financial Conduct Authority to hold a two-day ‘CryptoSprint’ in May alongside industry participants to seek views on key issues relating to the development of a future cryptoasset regime.
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.
“We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and 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.”
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