The U.K. government announced a series of initiatives on Monday to make the country a global center for crypto-investment and technology.
“The measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” said Chancellor of the Exchequer Rishi Sunak.
Among the first steps will be to integrate stablecoins into the U.K. finance system, according to Sunak’s statement and comments at the Global Finance Summit by John Glen, a minister of state at the Treasury.
“This will enable consumers to use stablecoin payment services with confidence,” Glen said. “The government will introduce this legislation as part of an ambition to deliver a world-leading regulatory regime for stablecoins.”
According to a report published in 2019, the Financial Conduct Authority (FCA) said crypto firms using digital assets for cross-border payments may be subject to payments-services regulations, but not the tokens themselves.
Taxes
Meanwhile, the Treasury is seeking input from the public on the tax system changes it plans to make. “We don’t think the tax code will need major surgery to make it work more easily for crypto,” Glen said.
“The U.K. is also playing a leading role in negotiations on the new tax reporting framework to enhance tax transparency and consumer confidence while enabling a level playing field in tax reporting globally,” he added.
Additionally, the U.K. Treasury will aim to resolve specific issues like the treatment of decentralized finance loans and staking. In addition, it will remove any restrictions that discourage U.K. fund managers from investing in crypto assets.
UK regulators are keeping an eye on decentralized autonomous organizations (DAOs). Treasury asked the Law Commission, an independent body responsible for ensuring fair laws in England and Wales, to consider the legal status of DAOs. Blockchain-based groups or companies, or DAOs, usually have a native crypto token that allows token holders to vote on important company decisions.
The crypto regime
In addition to the stablecoin legislation, the Treasury is marching on with broader plans to set up a “world-leading regime … [facilitating] safe and sustainable and I hope, rapid innovation,” Glen said.
In order to guide the regulatory process, the government will create a crypto asset engagement group. Glen explained that the group will be headed by a minister, and senior representatives from the FCA, Bank of England, and businesses will be included in it. The group will meet up to eight times a year.
Additionally, legislation is planned to create a financial market infrastructure or “sandbox,” which will enable firms to test distributed ledger technology.
Meanwhile in May, the FCA will hold a two-day CryptoSprint to gather views from the industry on crypto-related issues.
An NFT?
As Adding to the excitement, Glen said, the UK government has entrusted The Royal Mint with creating a non-fungible token (NFT) later this summer as “an emblem of the forward-looking approach we are determined to take.”
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