JUST

United

Prime

Bank AI

Read

The UK is setting new regulations for stablecoins and the wider cryptocurrency market, aiming to enhance financial stability and consumer protection while fostering innovation.
The Bank of England (<a href="https://crypto.news/tag/bank-of-england/" data-type="link" data-id="https://crypto.news/tag/bank-of-england/" rel="noopener noreferrer nofollow">BOE</a>), working with the Financial Conduct Authority (<a href="https://crypto.news/tag/uk-fca/" data-type="link" data-id="https://crypto.news/tag/uk-fca/" rel="noopener noreferrer nofollow">FCA</a>), is rolling out a plan to manage the stablecoin market—cryptocurrencies that are usually tied to a stable asset like the British pound. This move comes right after the UK government shared its own rules for overseeing digital currencies.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter">
 <div class="wp-block-embed__wrapper">
 <blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 JUST IN: 🇬🇧 Bank of England proposes allowing stablecoins as a payment option for goods and services.— Watcher.Guru (@WatcherGuru) <a href="https://twitter.com/WatcherGuru/status/1721562492365676616?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">November 6, 2023</a>
 </blockquote>
 <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
 </div>
</figure>
By early 2024, the BOE will <a href="https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/letter/2023/november/innovations-in-the-use-of-deposits-emoney-and-regulated-stablecoins.pdf" data-type="link" data-id="https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/letter/2023/november/innovations-in-the-use-of-deposits-emoney-and-regulated-stablecoins.pdf" target="_blank" rel="noopener noreferrer nofollow">start regulating stablecoins</a> that are essential to the payment systems, while the FCA will handle the rest of the crypto market. This decision is part of a bigger picture where the UK, under Prime Minister Rishi Sunak, wants to become a key player in the world of crypto.
The BOE is focusing on stablecoins because they believe these to be less precarious for the financial system compared to other digital money when used in big payment systems. The FCA says that any company that wants to offer stablecoins in the UK will first need to receive approval.
You might also like: <a href="https://crypto.news/global-watchdog-stablecoin-cons-outweigh-pros-for-cross-border-transactions/" rel="noopener noreferrer nofollow"> Global watchdog: Stablecoin cons outweigh pros for cross-border transactions </a>
An interesting point in the UK’s plan is that it allows <a href="https://crypto.news/tag/stablecoin/" data-type="link" data-id="https://crypto.news/tag/stablecoin/" rel="noopener noreferrer nofollow">stablecoin</a> companies to make money from the interest or other returns they get from the assets backing their coins.
However, this could raise some eyebrows because if interest rates go up, the companies might profit while the consumers don’t see those benefits—something the regulators are aware could be seen as unfair.
By setting out these rules, the UK is getting in line with other countries like those in the European Union and Japan, which have already made <a href="https://crypto.news/japan-to-lift-its-ban-on-foreign-stablecoins-in-2023/" data-type="link" data-id="https://crypto.news/japan-to-lift-its-ban-on-foreign-stablecoins-in-2023/" rel="noopener noreferrer nofollow">similar rules</a>. This shows a gap with the United States, which hasn’t yet come out with a clear set of regulations for stablecoins and the broader <a href="https://crypto.news/market-cap/" data-type="link" data-id="https://crypto.news/market-cap/" rel="noopener noreferrer nofollow">crypto market</a>.
Read more: <a href="https://crypto.news/uks-fca-to-authorize-overseas-stablecoin-providers/" rel="noopener noreferrer nofollow"> UK’s FCA to authorize overseas stablecoin providers </a>

Bank of England releases stablecoin regulation plan

crypto.news

Other articles published on Nov 6, 2023

Prominent Cryptocurrency Attorney Predicts Favorable Outcome for Ripple in SEC Lawsuit

Bloomberg Law 2024 Unveils Legal Trends and AI’s Impact on Legal Landscapes

FTX Aims for Court Go-Ahead on $744 Million Asset Sale Amid Bankruptcy

Hong Kong’s HashKey exchange to list Uniswap token

Ionise protocol unveils first money market on Zilliqa

HIVE Digital Surpasses 4 Exahash Milestone Amidst Cryptocurrency Volatility

Join our free newsletter for daily crypto updates!