The United Kingdom HM treasury has committed itself to establishing a safe framework for the use of stablecoins. The "FSM Bill" plans to expand on current crypto asset regulations to establish clear rules for the new technologies.
Last week, the HM treasury of the United Kingdom announced the Edinburgh reforms to drive growth and competitiveness in the financial services sector. His Majesty’s treasury is the UK government’s economic and financial treasury and oversees regulation of financial services.
Further stablecoin regulation in the UK
The Edinburgh reforms mentioned the Financial Services and Market (FSM) Bill aimed to establish a safe regulatory environment for stablecoins - which "may be used for payments." Not just regulating stablecoins, the government plans to bring a “broader range of investment-related crypto assets activities into regulation.” According to a June 2022 report by the United Nations Conference on Trade and Development (UNCTAD), over 5% of the UK population owns cryptocurrencies. Hence the regulations are deemed necessary to protect citizens, especially after the collapse of FTX that caused chaos in the crypto industry.
Further, the government wants to empower the Financial Conduct Authority (FCA) through regulations. The FCA would take measures like restricting foreign companies and limiting crypto advertising. They plan to protect consumers from fraud, mismanagement and false advertising with regulations. The reform also mentions the government’s plans to consult the UK retail CBDC alongside the Bank of England.
A future crypto hub?
Back in April, Rishi Sunak, the prime minister of the UK, tweeted that the government is working on making the UK a new global crypto hub. Back then, he was serving as a Finance Minister of the nation. While some believe the new PM is a crypto-friendly ally, others think that he is more “pro CBDC” instead of “pro-crypto.” If the UK were to take the lead in crypto regulation, more countries might follow to provide guidelines for the asset class.
We're working to make the UK a global cryptoassets hub. We want to see the businesses of tomorrow, and the jobs they create, here in the UK.
Today @JohnGlenUK set out how we are going to encourage crypto investment and technology in UK markets. 👇https://t.co/MdZ5IOLZtH
— Rishi Sunak (@RishiSunak) April 4, 2022