The United Kingdom’s treasury department, Her Majesty’s Treasury, has launched a consultation process for stablecoins with respect to their application in the national economy, according to an official document published in Jan. 2021.
- Saying that the process will be an “agile, risk-led approach”, the consultation calls for evidence to support the safe use of stablecoins
- While conceding that emerging assets may have potential in reducing costs and increasing efficiency in cross-border transactions, the Treasury also notes that the lack of regulation could result in failures relating to consumer protection
- The consultation, which will run until March 2021, will help the authorities form a broader regulatory framework
- Taking a staged approach, the focus will initially be on applying stablecoins as a means of payment and for services, “either directly or indirectly to consumers”
- The consultation comes at a time when countries like China are leading successful CBDC trials -- the Treasury says that the UK is committed to continue being a "world-leader" in fintech
- The UK’s Financial Conduct Authority is also closely examining the market, and generally speaking has shown some openness to the market, having given both Gemini and Aave operational licenses
- Meanwhile, the US Treasury has told banks that they can use stablecoins for payments