The British government intends to develop plans to regulate the cryptocurrency market, focusing on a rapidly growing type of token known as stablecoins.
According to Arabiya Net, British Finance Minister Rishi Sunak is expected to make an announcement in the coming weeks on a new cryptocurrency regulation; As reported by CNBC.
Details of the plans are still being finalized, but sources who spoke to CNBC say they are likely to be favourable, providing legal clarity for a sector that has often lacked regulation. So far.
According to the sources, Treasury officials have demonstrated a willingness to understand the intricacies of the cryptocurrency market and so-called stablecoins, which are digital assets that derive their value from existing currencies such as the US dollar.
Discussions were held with a number of companies and trade groups. This includes the Winklevoss brothers' cryptocurrency exchange, Gemini, which is pegged to the US dollar, one source said.
Stablecoins have seen an exponential growth in usage over the past few years, along with a surge in interest in cryptocurrencies on a larger scale. Tether is the world's largest stablecoin, with a total circulating supply of more than $80 billion, up from about $4 billion two years ago.
Financial stability risks
This comes as the Bank of England on Thursday called on policy makers to expand regulatory frameworks to reduce the risks posed by crypto to financial stability.
BoE Deputy Governor Sam Woods has written to several bank CEOs, saying that there is a growing interest from banks and investment firms to enter the various crypto markets.
In CNBC sources, the Treasury's move is seen as a response to President Joe Biden's executive order calling for coordination by various US federal agencies on currency regulation. encrypted. Several industry insiders also lamented the lack of similar action from the UK.
The UK's Financial Conduct Authority (FCA) has said that a large number of cryptocurrency firms do not meet required anti-money laundering standards. Only 33 companies succeeded in registering, while more than 80% of the companies evaluated by the regulator either withdrew or were rejected.
