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UK gets serious about Global Stablecoins

PAR002_123 • Nov 12, 2020

Following a successful exit from the European Union (EU) the UK has set out plans to extend the UK's Global leadership in Fintech


The Chancellor, Rishi Sunak, announced on Monday to MP's the forthcoming regulatory proposals for Stablecoins and ongoing research into CBDC for the post-Brexit future of UK financial services. 

In his first speech on financial services since taking over as chancellor in February, Mr Sunak vowed that the UK would remain an “open, attractive international financial centre” at the end of the Brexit transition period on January 1 and stated categorically that the government will do everything within its powers to ensure the nation moves forward as a transparent, attractive and well-regulated market, and lead the world in pioneering innovative technologies. 

The Chancellor said the Treasury would propose a new regulatory approach for “stablecoin” initiatives and said officials were working on plans for central banks to issue their own digital currencies “as a complement to cash”.

Runak Said,

“We are starting a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre.


Regulators around the world have been considering their response to the regulation of Stablecoins as the emergence of Global Stablecoins such as Facebook’s Libra coin continues to make progress in the evolution of payment systems. Whilst the Financial Conduct Authority (FCA) has provided specific regulatory guidance on the application of the UK regulatory framework to stablecoins, at an international level the Financial Stability Board (FSB) recently published its report (12 October 2020) setting out recommendations on how to promote coordinated and effective regulation, supervision and oversight of Global Stablecoin (GSC) arrangements.


Addressing the issue of regulation, Sunak told MPs,


"To harness the potential benefits of stablecoins, whilst managing risks to consumers and financial stability, the Government will propose a regulatory approach for relevant stablecoin initiatives that ensures they meet the same minimum standards we expect of other payment methods."


Sunak was clear that the UK's willingness to acknowledge and support new technologies such as stablecoins is consistent with the UK's innovation-friendly approach and ongoing commitment to promote the UK as a leading global centre for FinTech.

"The UK has long been a pioneer in financial services and will remain at the forefront of technological innovation. We’re doing what’s right for the UK and providing firms with certainty and stability.” 

Rishi Sunak in front of UK Flag


Amid a week of decisive negotiations between the U.K. and the European Union over a post-Brexit trade deal, the UK is potentially heading for a no-deal Brexit at the end of transition period. Mr Sunak confirmed the UK would recognise many areas of EU financial services as having a supervisory system equal to the UK’s own rules from January. The chancellor said the UK was “acting unilaterally to provide clarity”.


The creation of a strong but proportionate regulatory framework would maintain robust levels of customer protection, enhance the banking and finance sector’s competitiveness and make the UK's financial system the safest and most transparent place in the world to conduct business. 


HM Treasury Logo with White Background

Source: https://www.gov.uk/government/news/chancellor-sets-out-ambition-for-future-of-uk-financial-services

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