Despite recent market turbulence, the UK is still dedicated to being a global center for the cryptocurrency business. Member of Parliament and HM Treasury Economic Secretary Andrew Griffith emphasized his dedication to the sector by calling it “the sector I have dedicated the most time to” during a UK Parliament Treasury Committee meeting on January 10.
The following phases will be the launch of a wholesale stablecoin and the Financial Markets Infrastructure (FMI) sandbox. The Financial Services and Markets (FSM) bill, which will also receive its second reading in the House of Lords on January 10, has those components.
In the “long runtime” preceding the probable launch of a central bank digital currency (CBDC), Griffith predicted that a stablecoin would serve as the initial application of what is expected to be a wholesale settlement coin.
Stablecoins are “here now”; thus, they require immediate attention, according to Griffith, who supported the work on the wholesale stablecoin. He pointed out that it is still being determined if private stablecoins would be allowed in case a CBDC was to be launched. He added that British retail CBDC if one were to be introduced, would be anonymous and intermediary.
In “weeks, not months,” a consultative paper on CBDC will be released, followed by another on crypto legislation. In addition, the government will hold at least six roundtables with the cryptocurrency industry this year.
He further claimed that the administration does not ignore and believes that the technology is just a phase. Griffith said that, unlike blockchain technology, current technology is unable to address problems like settlement time in the banking sector disruptively.
Griffith noted a distinction between using cryptocurrency as a kind of investment and a payment method for retail customers. Griffith stated that unbacked cryptocurrency may “find a role or not in the market.”
For digital and financial inclusion, crypto-based payment methods are a problem. However, according to Griffith, there is a strong commitment to the continuous usage and accessibility of cash, in which banks continue to have a part.
The FSM bill will also permit the licensing of a few new payment apps in the FMI sandbox and their release on the market, and it might “be done before Easter.” According to Griffith, the use cases for crypto-based wholesale fintech may initially be found in ledgers and registers “in the middle office.”
Griffith promised a committee member that complete regulation of the cryptocurrency asset markets would not be accomplished in 2023.
Consumer protection is currently greatly aided by the regulation of cryptocurrency advertisements. Customers can verify that they are doing business with a regulated company by looking for the Financial Conduct Authority (FCA) emblem on advertisements. Laura Mountford, the committee’s deputy director for payments and innovation at the Treasury, spoke. AShe quoted the FCA, asserting that just 40% of customers recognize or believe that purchasing cryptocurrency assets is a gamble.