UK Opens Consultation Regarding Stablecoins, Wants to Remain FinTech Leader

UK Opens Consultation Regarding Stablecoins, Wants to Remain FinTech Leader

By Abhimanyu Krishnan | News | 8 Jan 2021

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

Abhimanyu Krishnan
Abhimanyu Krishnan

Technophile, cryptocurrency enthusiast and journalist.


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