In a Announcement UK Chancellor of the Exchequer Rishi Sunak, published on November 9, noted the upcoming regulatory proposals alongside other objectives for the country’s financial services sector, including a review of the UK listing regime and support for green finance.
“New technologies such as stablecoins – privately issued digital currencies – can change the way people store and exchange their money, making payments cheaper and faster.”
The news intervenes amid a week of decisive negotiations the UK and the European Union following a post-Brexit trade deal. Chancellor Sunak said he hopes that in the future the UK’s financial services industry will “lead the global conversation about new technologies such as stablecoins and central bank digital currencies”:
“We are entering a new chapter in the history of financial services, renewing the UK’s position as the world’s leading financial center […] Our plans will ensure that the UK develops as an open, attractive and well-regulated market. “
While details are sparse, the announcement claims that the draft guidelines will require stablecoin initiatives to adhere to the same minimum standards as entities working with other payment methods.
The document also reveals that both the Central Bank of England and the Treasury are currently investigating a CBDC, with the Chancellor welcoming the work of the two departments regarding ‘whether and how central banks can issue their own digital currency in addition to cash. ‘.
The regulatory implications of stable tokens became a major concern following Facebook’s announcement of its plan to launch its digital currency Libra in June 2019.
Since then, European legislators have consistently called for the development of strict and clear regulatory guidelines before allowing private stablecoins take root within their jurisdictions, with an emphasis on concerns about monetary sovereignty and consumer protection.
In contrast, the UK Treasury Chancellor appears to have made a much sober assessment of the fast-growing stablecoin sector, noting that stable token initiatives will receive the same scrutiny as existing payment companies.
We will publish a consultation to ensure that new privately issued currencies, stablecoins, meet the high standards we expect from other payment methods.
– Rishi Sunak (@RishiSunak) November 9, 2020