The United Kingdom HM treasury is committed to establishing a safe framework for the use of stablecoins. The FSM Bill plans to regulate crypto assets.
This Friday, the HM treasury of the United Kingdom announced the Edinburgh reforms to drive growth and competitiveness in the financial services sector. HM Treasury is an abbreviation for His Majesty’s treasury which is the government’s economic and financial treasury.
United Kingdom to Regulate Crypto Assets and the Use of Stablecoins
The Edinburgh reforms mentioned the Financial Services and Market (FSM) Bill aimed to “establish a safe regulatory environment for stablecoins – which may be used for payments.”
Not just regulating stablecoins, the government plans to bring a “broader range of investment-related crypto assets activities into regulation.” According to a June 2022 report by the United Nations Conference on Trade and Development (UNCTAD), over 5% of the UK population owns cryptocurrencies. Hence the regulations are deemed necessary to protect citizens, especially after the collapse of FTX that caused chaos in the crypto industry.
Further, the government wants to empower the Financial Conduct Authority (FCA) through regulations. FCA would take measures like restricting foreign companies and limiting crypto advertising. They plan to protect consumers from fraud, mismanagement, and false advertising with regulations. But, the community believes that the restriction on advertising will result in lower revenues for companies already severely hit by the bear market.
The reform also mentions the government’s plans to consult the UK retail CBDC alongside the Bank of England. Most recently, India launched the Digital Rupee retail pilot on Dec. 1.
Rishi Sunak, the Crypto-Friendly Prime Minister
In April, Rishi Sunak, the PM of the UK, tweeted, “We’re working to make the UK a global cryptoassets hub.” Back then, he was serving as a Finance Minister of the nation. The vision to make the UK a global crypto hub can be challenging without the regulations.
Some believe Rishi Sunak is a crypto-friendly Prime Minister and hence will not do “bad stuff” with regulations. But, others believe that he is more “pro CBDC” instead of “pro-crypto.”
The community speculates with the UK taking the lead in crypto regulations, more countries might follow to regulate the asset. Nirmala Sitharaman, the finance minister of India, wants to prioritize crypto regulation in the G20 Summit as the nation has the presidency of the Summit for one year.
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