Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Cryptocurrency: UK Treasury to regulate some stablecoins

Cryptocurrency: UK Treasury to regulate some stablecoins

The Treasury has announced that it will regulate some cryptocurrencies as part of a wider plan to make the UK a hub for digital payment companies.

So-called "stablecoins" will become recognised forms of payment to give people confidence in using digital currencies, it said.

Stablecoins are designed to have a stable value linked to traditional currencies or assets like gold.

They are considered less volatile than cryptocurrencies such as Bitcoin.

The Treasury also said it planned to consult on regulating a much wider range of digital currencies later this year, without saying which they might be.

Chancellor Rishi Sunak said: "We want to see the [cryptocurrency] 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."

The Treasury has not yet confirmed which stablecoins will be regulated; well-known ones include Tether and Binance USD.

Stablecoins are currently used in the United States to facilitate trading, lending or borrowing of other digital assets.

However, they are not without controversy. Tether, a Hong Kong based company, has faced questions over its business practices and was fined $41m in 2021 by the US Commodities Futures Trading Commission for allegedly misstating its reserves.

The UK's Treasury said regulating stablecoins would ensure they could be used "safely" by the public.

Cryptocurrencies are virtual or digital currencies that can be traded or used to buy goods and services, although not many shops accept them yet and some countries have banned them altogether.

They are exchanged via "peer-to-peer" transactions, meaning there are no banks or other third parties involved.

Wild fluctuation in the value of some digital currencies has led regulators to warn they pose risks. However, they are increasingly going mainstream, with major financial companies now investing in them.

Meanwhile, Tesla founder Elon Musk, the richest person in the world, has voiced his support for virtual currencies and said Bitcoin is a "good thing".


NFTs


Separately, the Treasury said it will ask The Royal Mint to create a Non-Fungible Token (NFT) this summer.

NFTs are assets in the digital world that can be bought and sold, but which have no tangible form of their own.

The digital tokens, which emerged in 2014, can be thought of as certificates of ownership for virtual or physical assets. NFTs have a unique digital signature which means they cannot be copied or replicated.

UK Financial Services Minister John Glen said the UK saw "enormous potential in crypto" and had a "detailed plan [for] harnessing the potential of blockchain and supporting the development of a world-best crypto ecosystem".

"What does the future of crypto here in the UK look like? No-one knows for sure," he said in a speech.

"But we think that by making this country a hospitable place for crypto we can attract investment [and] generate swathes of new jobs."


Financial and environmental concerns


Regulators are racing to draw up rules to manage cryptocurrencies amid concern that their growing popularity could threaten established financial systems.

In December, the Bank of England's deputy governor said that while only about 0.1% of UK wealth was currently held as digital assets, that proportion was growing quickly.

Sir Jon Cunliffe told the BBC that if the value of cryptocurrencies fell sharply, it could have a knock-on effect.

Meanwhile, the US is moving to craft regulations amid rising concern that the cryptocurrency industry is a haven for criminals.

The process of generating digital coins via banks of powerful computers, called mining, is also highly energy intensive. Recent research suggests Bitcoin now generates carbon emissions comparable to the country of Greece.

Mr Glen admitted there were concerns about the environmental impact and said the government "will be looking closely at energy usage associated with certain crypto-technologies".


What is cryptocurrency and how does it work?


AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
Italy Faces Population Decline Amid Youth Emigration
Trump Accuses China of Violating Trade Agreement
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Russia Accuses Serbia of Supplying Arms to Ukraine
Gerry Adams Wins Libel Case Against BBC
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
EU Majority Demands Hungary Reverse Anti-LGBTQ+ Laws
Top Hotel Picks for 2025 Stays in Budapest Revealed
Iron Maiden Unveils 2025 Tour Setlist in Budapest
Chinese Film Week Opens in Budapest to Promote Cultural Exchange
Budapest Airport Launches Direct Flights to Shymkent
Von der Leyen Denies Urging EU Officials to Skip Budapest Pride
Alcaraz and Sinner Advance with Convincing Wins at Roland Garros
EU Ministers Lack Consensus on Sanctioning Hungary Over Rule of Law
EU Nations Urge Action Against Hungary's Pride Parade Ban
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
U.S. Considers Withdrawing Troops from Europe
Russia Deploys Motorbike Squads in Ukraine Conflict
Critics Accuse European Court of Human Rights of Overreach
Spain Proposes 100% Tax on Non-EU Holiday Home Purchases
German Intelligence Labels AfD as Far-Right Extremist
Geert Wilders Threatens Dutch Coalition Over Migration Policy
Hungary Faces Multiple Challenges Amid EU Tensions and Political Shifts
Denmark Increases Retirement Age to 70, Setting a European Precedent
Any trade deal with US must be based on respect not threats', says EU commissioner
UK Leads in Remote Work Adoption, Averaging 1.8 Days a Week
Thirteen Killed in Russian Attacks Across Ukraine
High-Profile Incidents and Political Developments Dominate Global News
Netanyahu Accuses Western Leaders of 'Emboldening Hamas'
Ukraine and Russia Conduct Largest Prisoner Exchange of the War
×