On Monday, the UK government recognized stablecoin as a valid means of payment in the country.
The country is now closer to permitting stablecoin to be used as a means of payment after releasing plans for its regulation.
The UK Treasury revealed that stablecoins would be used within regulation, indicating that it’ll be recognized as a form of payment.
During the announcement, the government stated that the measures would involve legislating for a ‘financial market infrastructure sandbox’ to assist companies in innovating an FCA-based ‘CryptoSprint’ that’s operating with the Royal Mint on NFTs, including the engagement group to function very closely with industry.
UK Government- stablecoins can become a widespread form of payment.
In 2021, the UK government expressed that stablecoins can potentially become a widespread form of payment that will drive consumer efficiency and choice.
In particular, Rishi Sunak, Chancellor of the Exchequer, maintained, “It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country. 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.”
Sunak concluded, “This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
Further, the government notes that stablecoins are presently used to facilitate investment and trading in unbacked crypto assets like Bitcoin. And it’ll play a key role in emerging DeFi applications.
This positive gesture on crypto comes as regulators struggle to strike a middle ground between supporting some DeFi innovations and guiding consumers plus the financial system from risks.
Stablecoins are cryptos that peg their market value to an external reference. Its price is made to peg to fiat money, crypto, or exchange-traded commodities.
In other words, they’re a form of crypto assets pegged to a fiat currency like the dollar, aiming to maintain a stable value.
Stablecoins can offer a more effective form of payment and enhance customers’ choices with the right regulation.
Cryptocurrency day traders use Stablecoins as a haven by shifting unstable tokens to the dollar since market fluctuations can make them unsafe to hold.
Stablecoins, unlike Cryptos like Ethereum and Bitcoin, are cryptocurrencies with no volatility.
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