The UK Treasury plans to regulate stablecoins within a unified payment framework to modernize its financial system.
The UK Treasury has announced a comprehensive strategy aimed at overhauling the payment landscape by integrating stablecoins and tokenized deposits into a unified regulatory framework. This initiative is designed to streamline operations for companies that utilize stablecoins for transactions.
Oversight of stablecoin issuance and usage will shift to the Financial Conduct Authority (FCA), as part of the government's efforts to modernize the financial system in line with blockchain advancements. Finance Minister Lucy Rigby highlighted the initiative's potential to transform interactions between businesses and consumers through digital assets.
Key components of the reform include:
- Regulating payments facilitated by artificial intelligence;
- Expanding FCA's authority in open banking;
- Developing systems for tokenized wholesale markets.
To bolster these efforts, the government will allocate £1 million to the Centre for Finance, Innovation and Technology, with Chris Woolard, the former acting head of the FCA, taking charge of the tokenized systems development.
Anthony Young from CoinCover remarked that the emphasis on stablecoins reflects institutional investors' growing interest. He added that a robust asset storage infrastructure is vital for the technology’s broader acceptance, alongside a solid regulatory framework.
The Treasury plans to initiate consultations on reforming electronic money services soon, aiming to establish the UK as a leading hub for global financial services.
