The UK is mulling launching a digital pound while remaining committed to becoming a cryptocurrency hub, government representatives noted. British authorities also need to regulate payments in stablecoins, they said.
UK prepares to launch consultation on digital pound currency
Treasury Secretary Andrew Griffiths told MPs that the London executive is considering introducing a digital version of the national currency. He told Parliament’s Treasury Select Committee that a public consultation on the attributes of the digital pound will be launched in the coming weeks. Quoted by Reuters, he also stressed.
In the consultation, I am going to say that this is an if, not a when. We are not fully into the inevitability of doing this.
The digital pound raises many public policy issues and the government must “get them right,” Griffith said. He addressed concerns that state-sponsored coins would violate privacy, arguing that their design would not allow authorities to track individual transactions any more than measures targeted at crimes like money laundering.
Griffiths further explained that the first use case for a central bank digital currency (CBDC) issued by the Bank of England would likely be in wholesale payments, but that a privately issued fiat-backed stablecoin “will probably get there first.” He admitted, elaborating.
“I would like to see a regime for wholesale use of stablecoins for settlement purposes, this to be established within the FSMB,” the minister added, referring to the Financial Services and Markets Bill currently being debated in the UK Parliament.
UK May Adopt Broader Crypto Regulation Than EU
Andrew Griffith also revealed that a separate consultation will be launched on the UK’s regulatory approach to crypto assets in general The EU has already agreed to a comprehensive set of rules for the market, expected to come into force in 2024 While the EU has agreed to comprehensive rules for the market, the minister noted that UK regulation could be even broader and include decentralized finance.
“We want the right regime, operating in the right way, with the right balance,” he told committee members, promising to hold several roundtables with industry players as part of the discussions.
Andrew Griffith’s statement followed last year’s downturn in the valuation of major cryptocurrencies like Bitcoin and the collapse of large market players like the crypto exchange FTX. As the crypto winter continues, consumer protections in this space have come under scrutiny, the report notes.
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