The U.K. government does not want to be left out of the recent NFT craze. Rishi Sunak, the Chancellor of the Exchequer, announced on Twitter that stablecoins for payments will be regulated, and he has asked the Royal Mint to issue an NFT for the same.
In Brief:
- The UK Govt will provide conditions for issuers and providers of stablecoins to bring confidence to the general public.
- It will also reform taxation provisions related to DeFi loans and provide a framework to legalize DAO.
- It will also create FMI ‘Sandbox’ to benefit from Distributed Ledger Technology.
At the Innovate Finance Global Summit (IFGS), the Economic Secretary to the Treasury John Glen was speaking on behalf of the Chancellor. He announced that the UK will begin regulating stablecoins, legislating into the payments framework, and widen its gaze at regulating tokens like Bitcoin.
Glen said that the government wants consumers to use stablecoin payment services with confidence which is why it will create “the conditions for stablecoin issuers and service providers to operate and grow in the UK.” The UK government set out a vision for being a global hub for crypto-asset technology.
Commenting on it Sunak said, “We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
The UK financial services industry aims to be at the forefront of tech, the result of which is an NFT by the Royal Mint, the government-owned company responsible for minting coins for the U.K. Glen announced that it will be issued in the summer, describing it as “emblem of the forward-looking approach”.
The NFT initiative in the UK is part of a larger government effort. Glen also stated that the government intends to develop a framework for the legal status of decentralized autonomous organizations (DAO).
It would also like to reform the tax code to encourage the growth of cryptocurrency. According to the HM Treasury statement, the government intends to resolve specific taxation issues related to DeFi loans.
“We will be amending the Investment Manager Exemption to remove disincentives to UK fund managers including disincentives to UK fund managers including crypto-assets in their portfolios.”
Glen revealed that the government sees ‘an enormous potential crypto’ saying, “Never in the history of commerce has there been an invention as hyped and misunderstood as Distributed Ledger Technology and Blockchain.”
Therefore it will explore the potentially transformative benefits of Distributed Ledger Technology (DLT) by establishing a financial market infrastructure (FMI) ‘Sandbox,’ which will allow firms to experiment and innovate in providing infrastructure services.
As most stablecoins are pegged with a fiat currency and intended to maintain a stable value in the economy, regulators and higher authorities are coming to terms to make them acceptable by regulating them.
Two U.S lawmakers, Rep. Trey Hollingsworth (R-Indiana) and Sen. Bill Hagerty (R-Tenn.) had proposed a bill in the Senate and House recently, aiming to bring greater transparency to the stablecoin market.
