The UK Treasury Department announced on Monday that the authority is working on a draft to regulate privately owned stablecoins. The department added that it is actively researching about central bank digital currency (CBDC) as an alternative to cash.
The Treasury Chancellor, Rishi Sunak termed stablecoins and privately-issued digital currencies as a cheaper and faster way to make payments. Further, the Chancellor appreciated the work done by the Treasury Department and the Bank of England for research on CBDC as an alternative way to make payments.
Additionally, The Chancellor provided details about the plans to increase the number of new companies who want to list in the UK. A new task force will be established that will propose reforms to help innovative fintech companies to list in the country.
“New technologies such as stablecoins and privately-issued digital currencies could transform the way people store and exchange their money, making payments cheaper and faster. To harness the potential benefits of stablecoins, whilst managing risks to consumers and financial stability, the Government will propose a regulatory approach for relevant stablecoin initiatives that ensures they meet the same minimum standards we expect of other payment methods,” Sunak added.
Research on CBDC
Furthermore, the official announcement states that the UK is seriously considering the launch of its CBDC in the near future as most of the research work has been completed. The Chancellor aims to extend the UK’s global leadership in financial technology. “As the UK takes a leading role in the global conversation on Central Bank Digital Currencies, the Chancellor welcomed work by HM Treasury and the Bank of England to consider whether and how central banks can issue their own digital currencies as a complement to cash,” Sunak said.
The Chancellor outlined plans to position the UK at the forefront of green finance to help the country meet its 2050 net-zero target along with other environmental objectives.