In April, the UK’s Ministry of Economy and Finance, also known as the Ministry of Finance, announced its intention to put the UK at the forefront of technology by putting Stablecoin under national payment restrictions. This is a particularly intriguing and bold move. In contrast to recent shocksDue to TerraUSD (UST) depegging.
Then during the annual Queen’s Speech in May, Prince Charles notified Congress Approximately two bills that support “secure adoption of cryptocurrencies” and “creating the power to acquire and recover crypto assets more quickly and easily”.
Taken together, these initiatives, given the inevitable competition for innovation with the European Union, naturally give the impression of growing national interest in digital assets.
The last few months have been busy with cryptocurrencies in the UK.In addition to setting some important precedents like the High Court Decision to recognize non-fungible tokens (NFT) As a property or grayscale list First European ETF The London Stock Exchange witnessed several major announcements by regulatory agencies.
Relationship between the Ministry of Finance and Stablecoin
In the announcement on April 4, after several months of public consultation, Treasury approved Certain stablecoins can be a “broad payment method” for retail customers. He said he was ready to “take the necessary legislative steps” to bring Stablecoin into a straightforward regulatory framework.
As Koinly’s tax officer Tony Dhanjal explained to Cointelegraph, this announcement should be viewed as: Huge news and even game changers To lead to the reclassification of Stablecoin in the UK:
“When Stablecoin is no longer subject to capital gains tax, the use of cryptocurrencies could become even more widespread, and we will see the adoption of cryptocurrencies as a payment method in the mainstream industry.”
intention voiced According to the Treasury, it wasn’t limited to Stablecoin. Financial regulators have also teased the launch of the Cryptoasset Engagement Group, which consults with industry stakeholders. We will reassess the national tax system for cryptocurrencies and establish a “financial market infrastructure sandbox” as well as Royal Mint’s own NFT.
but The infamous market collapse The second week of May, especially Stablecoin’s initial zero volatility promise, was painful, but did not discourage the Treasury. According to Independent, a law that uses stablecoin as a payment method will be included in the bills for financial services and markets.
What is currently known is that the Treasury does not plan to include stablecoins for algorithms such as UST in this law, only fully backed stablecoins such as tether ().USDT) Or USD coin (USDC) Under consideration.
Grab and recover
The aforementioned financial services and market bills, which may include stablecoin guidelines, arose as part of the Queen’s speech, a package of 38 legislative projects announced to Congress on May 10.
In its current form, it doesn’t make much sense, but the language itself sounds pretty benevolent to the industry. The bill aims to “take advantage of innovative technology opportunities in financial services.”
“We support the secure adoption of cryptocurrencies and resilient outsourcing to technology providers.”
So far, the point of the bill’s announcement is to create a national framework that does not imitate the EU. Initially it applies to the traditional financial sector, but similar requirements are expected for crypto assets.
Another part of the Queen’s Speech that is an important precursor to the crypto industry is economic crime and corporate transparency bills. At first glance, it doesn’t seem to be very friendly to digital currencies. We refer to digital currencies in the list of risk zones that UK enforcers are trying to squeeze. The bill will generate the following powers, as the only line that mentions cryptography goes:
“Getting and recovering crypto assets, the main medium used for ransomware, faster and easier.”
“The main medium of ransomware” is not necessarily a benevolent word, but the existence of an organization that can not only actually collect funds with cryptocurrencies but also obtain them will boost the market.
“A big step for Britain”
The general perception in the UK crypto community is positive, Djahal said. There is still a general belief that cryptocurrencies are a paradise for criminals. Therefore, he believes that regulation is welcome.
“It’s not that existing forces can’t seize ransomware money, but the anti-money laundering law enacted in 2002 before cryptocurrencies were accepted is probably not suitable for cryptocurrency purposes.”
Benjamin Whitby, responsible for Qredo’s regulatory issues, tends to agree with the issue. He told Cointelegraph:
“I feel that the recognition of the space in this proposal is very positive. Recognizing the asset class opens up the opportunity for more fintech companies to start incorporating crypto assets into the technology stack.”
The ambition to develop effective enforcement may still be perceived as somewhat vague at this point, but experts are excited about the announcement of Stablecoin. Whitby called it “a big step for Britain,” but said they shouldn’t make fun of themselves, saying “everything will go well.”
“Important people in a position to move for security. You can use regulated stablecoin to move into the world of T0 payments and reduce the burden of squeaks and fragile traditional infrastructure. “
Dhanjal believes that UK financial authorities may even look for their own stablecoin. Central bank digital currency (CBDC) — Government-sponsored “Britcoin” fixed to the Great British Pound. The purpose here is to maintain financial stability and address the variability inherent in cryptography, he states:
“With proper regulation, Britcoin can provide more efficient payment methods and expand consumer options, especially in emerging decentralized financial systems.”
Would you like to make Britain great again?
It’s hard not to compare Britain with its continental neighbors. Because they are separate and must compete with each other for talent and innovation. The Queen’s Speech spirit is based on that comparison and demonstrates a mission to “maximize Brexit’s freedom” or “enjoy the benefits of Brexit.”Overall, the word “Brexit” Mentioned 20 times. Whitby said the UK can and will be hiring faster than many jurisdictions, and moving away from the EU’s regulatory process will enable the UK to act faster. ..
“Cryptocurrency unlocks faster payments, removes credit risk and reduces payment time to near zero. This is a big win for commerce and the UK has set its intention to be at the forefront. The UK has a long history of exploring boundaries, crossing the sea on small ships, guaranteeing risk and forming new ventures. Cryptocurrencies are no exception. ”
Dhanjal is convinced that Britain’s centuries-old tradition of financial services, rich talent pool, and experience from the financial sector and start-ups around the world are likely to defeat its neighbors on the continent. I am. In his opinion, the UK does not want to adopt the general spirit of EU regulation, which is good news for the country.
“Now that the EU’s shackles have been removed by Brexit, the UK can accelerate through gear to become a global leader in crypto innovation and adoption,” he said.
Gilbert Hill, chief strategy officer of the blockchain-based data aggregation platform Pool, told Cointelegraph that the UK authorities are serious about launching a cryptocurrency company and working hard to create a paradise for expansion. , His estimation is that not all are efficient.
In particular, he found the current regulatory sandbox inflexible and said he rejected two-thirds of applicants. This has already leaked some of the best projects to mainland Europe. Hill also emphasized the strengths of the European approach.
“In a nutshell, the EU puts data reform at the heart of its strategy with the goal of destroying € 300 billion worth of silos annually, and everything from AI to Internet gatekeepers and data unions. There is a set of new legislation to cover. A new source of high quality Intel to build better Web3 products. “
To become a future leader, Hill said Britain needs a comparable degree of political will “shown on the mainland” and needs to break away from the inflexible FCA / sandbox model. Hopefully, the spirit of competition and the urge to justify separation from the continent will help the country make the right decisions.