The U.K. government has announced plans to regulate private stablecoins in the country, while setting out the latest position on a central bank digital currency (CBDC).
Earlier this week the U.K. Treasury said it was working on proposals for a new regulatory structure for stablecoins and other digital currencies, while suggesting plans were advancing towards a CBDC as an alternative to cash payments.
Chancellor Rishi Sunak said stablecoins and other digital currencies offered a cheaper, more efficient payment method than cash, welcoming the work that had already been undertaken by the Treasury and the Bank of England on developing a CBDC.
“New technologies such as stablecoins and privately-issued digital currencies could transform the way people store and exchange their money, making payments cheaper and faster. To harness the potential benefits of stablecoins, whilst managing risks to consumers and financial stability, the Government will propose a regulatory approach for relevant stablecoin initiatives that ensures they meet the same minimum standards we expect of other payment methods.”
In the announcement, the Treasury hinted that the Bank of England had already completed much of the exploratory work, and was sizing up the launch of a digital pound in the near future.
“As the U.K. takes a leading role in the global conversation on Central Bank Digital Currencies, the Chancellor welcomed work by HM Treasury and the Bank of England to consider whether and how central banks can issue their own digital currencies as a complement to cash.”
The move comes at a time when central banks around the world are increasingly focusing on central bank digital currencies.
Central banks in the United States, European Union, Canada, India and elsewhere are known to be at advanced stages of researching the technology, while authorities in China have already run localized trials of the digital yuan.
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