UK agrees to accept stablecoins as payment
The United Kingdom is committed to opening up to the cryptocurrency sector. In a press release published this Monday, April 4, 2022, the British government announced its intention to make the United Kingdom “a global hub for cryptocurrency technology and investment”.
With this in mind, the government will put in place a series of measures to attract companies in the sector in the UK market. In particular, the United Kingdom plans to “to make the UK tax system more competitive”.
Concretely, changes will be decreed in order to reduce the taxes imposed on companies and users. According to John Glen, Economic Secretary to the UK Treasury, the British tax system will not need major changes to make it more suitable for the crypto-asset sector.
This relaxation is also intended to make it easier for UK fund managers to get into cryptocurrencies. In addition, the revision of the tax system will make it possible to incorporate decentralized finance services (DeFi)like loans, in British taxation.
Justifying the initiative by the jobs that will be created by companies in the sector, Rishi Sunak, Chancellor of the Exchequer and Second Lord of the Treasury, explains:
“My ambition is to make the UK a global center for crypto-asset technology. The measures we have outlined today will help ensure businesses can invest, innovate and grow in this country.”.
Among the flagship measures promised by the government is the regulation of stablecoins. These digital currencies “must be introduced in the regulations, paving the way for use in the UK as a recognized form of payment”the statement said.
In fact, it will be possible to pay for goods and services with stablecoins. The authorities do not specify which cryptocurrencies will be affected. On his Twitter account, Rishi Sunak points out:
“By recognizing the potential of this technology and regulating it, we can ensure financial stability and provide consumers with greater payment choice.”
The British government also specifies that it is looking into the case of decentralized autonomous organizations (DAOs). The British Treasury has asked the Law Commission, an independent law enforcement body, to review the legal status of decentralized organizations. John Glen clarifies:
“We are not going to lower our standards, but we will maintain our technology-neutral approach. Having robust and effective regulation will not hinder innovation, it will stimulate it”.
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An official NFT will be issued by summer 2022
The United Kingdom does not intend to stop there. To demonstrate its commitment to the cryptocurrency industry, the government has pledged to issue a non-fungible token (NFT) by summer 2022. Royal Mintthe body responsible for minting the national currency, was tasked with overseeing the creation of this digital asset.
Finally, the government also aims to rely on blockchain to optimize the functioning of UK financial markets. Depending on the country, blockchain can enable “synchronize and share data in a decentralized way to potentially achieve greater efficiency, transparency and resilience”.
The government is currently working on an infrastructure that will test the possibilities of blockchain. At the same time, an ambitious research program will be set up to assess the interest of the blockchain in the context of the management of sovereign debt.
In developing these various measures, the UK has undertaken to consult industry experts. These industry experts will make up a help and advice group called “Crypto Asset Engagement Group”. The Financial Conduct Authority (FCA)the policeman of the British financial sector, will meet with companies in the industry next May.
The U.K. flip-flop
So far, the UK has shown itself cautious about cryptocurrencies. The various regulations put in place by legislators have always hindered the development of companies in the British market.
In recent months, exchange platforms, such as Crypto.com (CRO), Coinbase or eToro have also been forced to remove several advertisements at the request of regulatory agencies. At the same time, the UK tax department, the HMRChas imposed a tax on all exchanges present in the territory.
More recently, the FCA even demanded the closure of all UK Bitcoin (BTC) ATMs. In this context, the British government’s announcement comes as a real surprise.
👉 Read also: FCA bans UK version of Binance from operating in the UK
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The United Kingdom wants to become the world leader in cryptocurrencies thanks to stablecoins and NFTs
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