In the face of a cryptocurrency market of more than $2 trillion and a trend of increasing popularity around the world, the United Kingdom is sending positive signals and is expected to become the latest country to fully regulate the industry.
This week, the U.K. announced a detailed plan to create a “global crypto-asset technology center,” including a package of measures that will focus on overseeing stablecoins, commissioning the Royal Mint to create NFTs to be issued this summer, and reviewing the tax system.
Stablecoins are a regulatory focus in the UK
Like financial regulators in major economies around the world, the UK has put the regulation of stablecoins on the agenda. John Glen, the UK’s economic secretary to the Treasury, called stablecoins “an area of immediate potential and concern in the cryptocurrency space.”
In a keynote speech at the Innovative Finance Global Summit on April 4, Glen said that the UK will pass legislation to bring some stablecoins into regulation “as part of our ambition to provide a world-leading regulatory regime for stablecoins,” in line with existing regulations. payment frame.
At present, most stablecoins are anchored to legal currency or other assets with stable value. Among them, the current stablecoin with the largest market value, Tether, is pegged to the US dollar.
According to Coin Metrics, the total market capitalization of stablecoins was about $180 billion as of the end of February this year, up from about $38 billion a year ago.
The UK Treasury has yet to confirm which stablecoins will be regulated
So far, senators in the United States have announced their draft bill on stablecoins. The European Central Bank also intends to strengthen the supervision of stablecoins. It has reportedly asked EU lawmakers to obtain a veto over private stablecoin projects.
The UK wants to become a ‘global hub’ for cryptocurrencies
In his keynote address at the Innovative Finance Global Summit, Glen also said that the Royal Mint has been commissioned to issue NFTs this summer as “symbol of the forward-looking approach we are determined to take.”
In addition to this, the announced measures also include a possible re-examination of the UK government’s tax system in order to “make it easier for crypto to work.” At the same time, it will also remove the headwinds of UK fund managers from holding cryptocurrencies in their portfolios.
In addition, the UK will also establish a high-level crypto-asset group, in conjunction with the UK’s Financial Conduct Authority (FCA) to organize a series of “crypto sprints” to study the legal, technical and regulatory challenges facing the industry, so as to guide the future. The next step in the world of encryption.
Backing up the UK’s determination to create a “global crypto asset hub,” Glen also wants to position the UK as a pro-innovation jurisdiction, enabling the country to attract some “[blockchain] companies that don’t yet have a permanent headquarters.”
However, before this positive signal to the outside world that the United Kingdom supports the development of the encryption field, British regulators have stepped up their scrutiny of the encryption industry.
The U.K. has cracked down on “misleading” crypto-asset advertising since the beginning of this year, with only businesses regulated by the UK’s Financial Conduct Authority (FCA) or the Bank of England being allowed to post their own crypto-asset promotions.
Additionally, cryptocurrency companies operating in the UK must be registered with the FCA in accordance with anti-money laundering regulations. While the FCA has delayed the deadline for cryptocurrency company registrations to June this year and allowed companies to continue trading while seeking full authorisation, some firms have already closed their crypto operations in the UK and moved abroad.
According to Bloomberg, former U.K. Chancellor of the Exchequer Philip Hammond said in January that “the U.K. has fallen behind other financial centers such as the European Union in developing clear regulations for the nascent crypto industry.”
Mixed signals from major economies
Earlier last month, U.S. President Joe Biden signed an executive order titled “Ensuring the Responsible Development of Digital Assets,” requiring the U.S. to maintain a global leadership position in the field of digital assets.
On March 14, MEPs also agreed on draft rules for the regulation, consumer protection and environmental sustainability of crypto assets.
Bitcoin scholar Gu Yanxi previously said in an interview with reporters that the US President’s executive order on digital assets not only affects the development of digital assets in the United States, but also “certainly affects the decision-making of other countries.” Because this digital asset industry is developing very rapidly, it is well known.
On the day Biden signed the executive order, Dubai approved the virtual asset law and established the Dubai Virtual Assets Regulatory Authority.