The UK has announced a plan to recognise stablecoin as a valid form of payment as part of a wider strategy to turn Britain into a global hub for cryptoasset technology and investment.
As part of the move, the UK government intends to bring stablecoins within the payments regulatory perimeter to enable stablecoins issuers and service providers to operate and invest in the country.
UK finance minister Rishi Sunak said: “We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.
“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
In addition to regulating stablecoins, the government is set to launch a ‘financial market infrastructure sandbox’ to bolster the financial services segment in the country.
It also plans to set up a Cryptoasset Engagement Group to work closely with the industry and drive further development in the cryptoasset market.
Stablecoins, which are designed to maintain a stable value, are a type of cryptoasset that is usually pegged to fiat currencies, such as the dollar.
In December last year, a report by Nikkei Asia said that Japan’s Financial Services Agency was planning to propose a new regulation in 2022 to limit stablecoin issuance to banks and wire transfer companies.
Last November, the European Central Bank approved a new oversight framework for electronic payments, which would incorporate cryptocurrencies and stablecoins.