The UK administration will soon disclose its plan on regulating the cryptocurrency market, primarily focusing on stablecoins, according to industry sources close to the matter. More details of the plan will be revealed in due course of time, it added.
Sources interviewed by CNBC sought to dispel fear by saying that regulation favorable to the industry is being finalized which would provide the much-needed legal clarity for the sector.
They also told that Treasury officials have shown readiness to understand the intricacies of the crypto market, stablecoins, and other digital assets that derive their value from existing currencies like the U.S. dollar.
Further, the British Minister of Finance Rishi Sunak would be making an announcement within a few weeks about a new regulatory regime for crypto. Sources told CNBC requesting anonymity as the information is still under wrap.
As per the report, the department is in touch with a number of firms and trade groups including the Winklevoss brothers’ led crypto exchange Gemini. As a matter of fact, Gemini has its own stablecoin called the Gemini Dollar, which is pegged to the U.S. currency.
Despite lawmakers’ optimistic outlook, UK regulators have their own share of concerns with regard to crypto.
UK’s top bank calls for limiting risks arising from crypto
Last week, the UK’s central bank – The Bank of England [BoE] urged policymakers to expand regulatory frameworks to limit the risks posed by crypto to financial stability. BoE’s Deputy Governor Sam Woods wrote a letter to several bank CEOs saying there has been “increased interest” from banks and investment firms in “entering various crypto markets.”
Apart from that, there have also been concerns about digital assets being used to evade financial sanctions imposed on Russia since its invasion of Ukraine.
While digital assets are unlikely to provide a feasible way to circumvent sanctions at scale currently, the possibility of such behavior underscores the importance of ensuring innovation in crypto assets is accompanied by effective public policy frameworks to maintain broader trust and integrity in the financial system,” the BoE’s Financial Policy Committee said in a statement released on 24th March.