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British Treasury To Hammer Out Crypto Law Despite Bank Of England’s Doubts

6 Jul, 20223 min readRegulation
British Treasury To Hammer Out Crypto Law Despite Bank Of England’s Doubts

In April of last year, the British Treasury unveiled a number of efforts aimed at establishing the United Kingdom as a premier destination for crypto technology and investments.

In a press release that month, the Chancellor of the Exchequer, Rishi Sunak, stated that the steps described will help ensure that companies can “invest, develop, and grow” in the United Kingdom.

Three months later, on July 6, Sunak announced his resignation as Chancellor of the Exchequer, citing a series of claims against the government led by Boris Johnson.

Sunak was not the only individual to do so. In addition to other ministers, Health Secretary Sajid Javid left Johnson’s cabinet.

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New Crypto Framework In The Works

Despite his decision to separate himself from the Johnson administration, Sunak’s work marches forward.

Counter to the Bank of England’s concerns about the financial stability of the technology, the former finance minister is moving through with a proposed legislation that will clear the way for everyday cryptocurrency payments.

As part of the aim of the British Treasury and the government to make Britain a “crypto hub,” the British Treasury has indicated that it will introduce legislative changes recognizing stablecoins as a legitimate form of payment.

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This will allow consumers to utilize stablecoin payment services with confidence, British Treasury official John Glen stated at the recent Global Finance Summit.

Glen noted that the government will adopt this measure in an effort to establish a world-leading regulatory framework for stablecoins.

The UK’s financial regulator, the Financial Conduct Authority, released a study on cryptocurrencies in 2019 stating that organizations using digital assets for cross-border payments may be subject to payments services legislation, but the tokens themselves would not be regulated.

Bank Of England, British Treasury At Loggerheads

Meanwhile, the disagreement between the British Treasury and the Bank of England on cryptocurrencies is the most recent squabble between the two institutions, which have been at odds over Brexit policies, the cost-of-living dilemma, and other hot issues.

BOE’s warning comes after crypto prices have plummeted so severely in recent months that analysts have begun to doubt the technology’s future.

Andrew Bailey, governor of the Bank of England, remarked:

“The experience we’ve had over the past few weeks demonstrates that there are problems in both the unbacked crypto world and the so-called stablecoin sector.”

The Treasury stated the following in response to a consultation on crypto assets:

“The reasoning behind this is that certain stablecoins have the potential to become a popular form of payment, including among retail consumers, thereby increasing consumer choice and efficiency.”

Regulatory Framework For Stablecoins: Clearing The Way

Stablecoins are cryptocurrencies designed to maintain their value. The British Treasury and the government’s intention to build a world-leading regulatory framework for stablecoins is expected to pave the way for enterprises to enable daily transactions in stablecoins.

The government announced that consultations will be held before the year ends regarding the regulation of a broader range of crypto assets and related transactions.

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