Cryptoassets such as stablecoins could be vital going forward in facilitating cross border payment following the UK’s Brexit. Since the stablecoins fall outside regulatory realms, the UK is looking for ways of having its crypto laws close to other nations besides trying to define stablecoins.
The UK seeks to align its crypto regulations with other nations
As a result, the UK treasury has requested the crypto industry’s contribution o prospective regulation. In an announcement on Thursday of open consultation, the UK’s department for finance policy asked the crypto community to contribute to a series of the crypto regulation proposal. The announcement indicated that the government was inviting views from different stakeholders and more so from crypto assets firms on the proposals.
The UK voted to leave the European Union early last year and the freedom to work and live between the UK and European Union countries ended on New Year’s eve. As a result, there is a dilemma regarding how the country’s cryptocurrency rules should reflect those of other countries in Europe. The UK Treasury is seeking to understand the views of stakeholders regarding the extent to which the country’s approach should be in tandem with regulations in other jurisdictions.
Treasury wants to define stablecoins
Interestingly there is a proposal requiring all firms marketing stablecoins in the UK to have UK registration. The proposal reads, “due to the digital, decentralized and cross-border nature of stable tokens, the government and UK authorities are considering whether firms actively marketing to UK customers should be required to have a UK establishment and be authorized in the UK.”
Additionally, the consultation lays out existing regulations plus the new proposals. According to the Treasury, more focus is on stablecoins that currently don’t have a legal definition in the UK. Among the central proposals is defining what stablecoins entail. However, the Treasury has not proposed tying the new stablecoins definition to underlying blockchain infrastructure. Apart from defining stablecoins, the Treasury has also laid out potential areas requiring regulation including those that operate stablecoins and how they will report reserves.