The U.K. government on Monday announced a series of initiatives toward its goal of making the country a global center for crypto technology and investments.
“The measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” Chancellor of the Exchequer Rishi Sunak said in a press release.
"This will enable consumers to use stablecoin payment services with confidence,” Glen said. “The government will introduce this legislation as part of an ambition to deliver a world-leading regulatory regime for stablecoins."
In 2019, the Financial Conduct Authority (FCA), the U.K.'s financial regulator, published a report on crypto that said that crypto firms with digital assets for cross-border payments could be subject to payments services regulations but that the tokens themselves wouldn’t be regulated.
Meanwhile, the Treasury is looking to engage closely with the public on changes it wants to make to the tax system. "We don't think the tax code will need major surgery to make it work more easily for crypto," Glen said.
“The U.K. is also playing a leading role in negotiations on the new tax reporting framework to enhance tax transparency and consumer confidence while enabling a level playing field in tax reporting globally,” he added.
Decentralized autonomous organizations (DAO) haven't escaped U.K. regulator scrutiny. The Treasury asked the Law Commission, an independent body tasked with making sure laws in England and Wales are fair, to consider the legal status of DAOs. A DAO is a blockchain-based organization or company that is usually governed by a native crypto token, with anyone holding the tokens able to vote on important company decisions.
The crypto regime
In addition to the stablecoin legislation, the Treasury is marching on with broader plans to set up a “world-leading regime … [facilitating] safe and sustainable and I hope, rapid innovation,” Glen said.
The government will form a industry group called the "Crypto Asset Engagement Group" to help guide the next steps in regulation. The chairman of that group will be at the ministerial level, and the group will include senior representatives from the FCA, Bank of England and businesses, Glen said. It will meet up to eight times a year.
There are also plans for legislation establishing a financial market infrastructure, or “sandbox,” that will enable firms to test distributed ledger technology.
Meanwhile, the FCA will hold a two-day "CryptoSprint" in May, where it will seek views from the industry on issues related to developing crypto regulations.
CORRECTION (April 5, 08:13 UTC): Corrects Glen's title, removes extraneous full stop in third paragraph; adds dropped word in 11th. Removes "and enable" from 12th.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.