The UK treasury is poised to define new rules surrounding cryptocurrency and stablecoin regulation under the Financial Services and Markets Bill due to be presented before parliament today.
The bill is expected to hand additional powers to The Financial Conduct Authority and the Prudential Regulation Authority with an objective to facilitate “growth and competitiveness” in the global market.
A key part of the proposed reforms will likely concern how and if stablecoin assets can be implemented as a recognised form of payment, although recently appointed Chancellor of the Exchequer Nadhim Zahawi also signalled intent to “understand how Distributed Ledger Technology could be applied to a UK sovereign debt instrument”.
Discussing the bill at his first Mansion House speech on Tuesday July 19, Zahawi contended that the “landmark piece of regulation” will equip the UK with the tools to “seize the opportunities of Brexit”.
Crypto regulation is a key ongoing concern for the government, with stablecoin payments and central bank digital currencies (CBDCs) being at the top of the agenda under ex-Chancellor Rishi Sunak’s ambition to make “the UK a global crypto hub”.
Although this vision could be diluted following Sunak’s resignation, a successful leadership bid for the Conservative Richmond MP could inversely bring in a new era for Britain’s crypto economy.
Speaking to the wider financial landscape, Zahawi had more to say on the Brexit note: “I can announce today that we will repeal hundreds of pieces of retained EU law. UK financial regulation will once again be decided in the United Kingdom, for the United Kingdom, by the UK’s expert, independent regulators.”
UK crypto reputation plummets
The bill comes at a time when trust in crypto assets appears to be plummeting among the British public.
Research shared with Proactive by CRM platform Klaviyo suggested that over 40% of UK consumers “don’t trust” crypto due to its lack of safety and regulation.
Only 20% see crypto as a worthwhile investment.
Andrew Bialecki, CEO of Klaviyo said: “The UK Treasury simply doesn’t need to spend an awful lot of time looking for evidence, consumer sentiment is clear: Crypto is not about to replace traditional currency anytime soon.”
These findings contrast sharply with sentiment among US consumers, 44% of whom believe crypto “will become the normal way to pay online,” while 41% think crypto is “going to change the way we view money”.
Regardless of public sentiment, the UK government seems intent on regulating the market further, no doubt motivated by an unprecedented year of large-scale involvencies, withdrawal freeze, and controversies.