UK Regulators to Introduce Rules for Stablecoins in New Markets Bill
The much-anticipated financial services and markets bill to be presented to Parliament includes rules for the use of stablecoins as a means of payment.
Regulators in the U.K. are introducing rules for using stablecoins – cryptocurrencies whose prices are pegged to another asset – as payment tools to Parliament on Wednesday.
The rules are part of a long-awaited financial services and markets bill, aimed at strengthening the U.K. financial system post-Brexit, set to be presented to Parliament in the coming hours.
The government has previously said crypto will play a part in the country's broader post-Brexit strategy to increase economic competitiveness. In April, the U.K. Treasury announced a set of initiatives to help turn the country into a global crypto hub. The announcement promised new rules that would let consumers confidently use stablecoins for payments.
But a dramatic crypto market downturn, followed by the resignations of crypto-friendly finance minister Rishi Sunak and senior Treasury official Jon Glen, threatened to shake up the plans.
In May, the collapse of $18 billion stablecoin terraUSD prompted the Bank of England, the U.K.’s central bank, to publish a consultation on its plans to regulate similar crypto assets and to propose the bank be given the power to appoint administrators to oversee insolvency procedures for failed stablecoin issuers.
Earlier this month, Bank of England Deputy Governor Jon Cunliffe hinted at a delay on crypto regulations in light of the cabinet reshuffle, but promised stablecoin rules before the August summer break.
Explaining the new bill during his first speech as the newly appointed finance minister on Tuesday, Nadhim Zahawi said the framework “reinforces the U.K.’s position as a leading center for technology as we safely adopt crypto assets.”
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