The UK’s crypto industry has largely welcomed a new bill that highlights new rules about payment-focused crypto assets like stablecoins. However, the details on how the new rules will be interpreted by financial watchdogs are pending.
The bill is scheduled to be debated in Parliament for the first time in September. It will move through a complete legislative process that could be delayed as crypto advocates are still anticipating indications from regulators on how they plan to enforce the rules.
The bill can potentially give UK regulators new powers over payments-focused on crypto assets like stablecoin. Also, the newly proposed bill could bring crypto assets like stablecoins into the scope of local payments regulation.
James Alleyne, legal counsel at the London-based law firm Kingsley Napley stated that the rules proposed in the new bill are yet to be interpreted in order to fully understand the powers and approaches of the various regulators.
The proposed stablecoin rules are part of the larger financial services and markets bill that describes the U.K.’s post-Brexit economic strategy. With this, the country looks to extend existing financial regulations to cover payment-focused cryptocurrencies such as stablecoins.
These cryptocurrencies are defined broadly as “digital settlement assets” or DSAs. The bill also puts the UK Treasury in charge of describing what DSAs are. However, the Treasury needs to form the stablecoins rules in consultation with the Bank of England (BoE), Payments Systems Regulator (PSR) and Financial Conduct Authority (FCA), and other appropriate regulators.
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Chancellor of the Exchequer Nadhim Zahawi also confirmed the presence of stablecoin regulations in the UK bill. It should be noted that though stablecoin regulations were always meant to be part of the bill, the recent meltdown, especially of the Terra-UST platform had made it rather doubtful of their inclusion in the bill.
Another reason that stablecoins rules can be eliminated from the bill is the walkout of pro-crypto members such as Rishi Sunak, who in April announced that stablecoins for payments will be regulated. He has also asked the Royal Mint to issue an NFT for the same.
