The Treasury of the United Kingdom said on Wednesday that it would attempt to regulate some varieties of stablecoins as a method of payment as part of a comprehensive financial bill aiming to eliminate hundreds of EU-retained laws.
The Financial Services and Markets Bill, submitted to the House of Commons, would also provide the government additional authority to require regulators to review its financial laws in situations judged to be in the public interest.
The EU, which split from the United Kingdom when Brexit took effect in early 2020, moved similarly on stablecoin regulation through the Markets in Crypto Assets (MiCA) law late last month.
Specifically, MiCA would subject major stablecoin issuers to stringent operational and prudential requirements, with further constraints contingent on their widespread usage and a daily transaction ceiling of 200 million euros ($203.3 million).
Following the aftermath of Terra’s collapse in May, authorities throughout the globe consider stablecoins as posing a danger to financial stability. MiCA and the United Kingdom’s current proposals attempt to address this perception.
As outlined in the UK’s Financial Services bill, Financial Markets Infrastructure Sandboxes will be established so corporations may try out new technologies and procedures.
The sandboxes, which are usually an isolated testing environment before goods are exposed to the broader public, would boost the efficiency, transparency, and resiliency of new fintech products, including cryptocurrencies, according to a statement from the UK Treasury.
The chancellor of the exchequer, Nadhim Zahawi, stated in the announcement, “Today is a landmark day for financial services in the UK,”
The bill would amend EU-derived law regulating the United Kingdom’s capital markets To sustain the United Kingdom’s position as an international and competitive financial hub. It also upholds stringent regulatory norms, added the chancellor.
