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UK unveils measures in bid to become ‘global hub’ for crypto

The UK government has announced plans to become the “global hub” of the crypto industry, offering new regulations for stable currencies, the Royal Mint NFT currency and another package of other means of courting digital asset companies.

City Minister John Glenn said in a speech on Monday that the government was determined to show “Britain is open to business and open to crypto business”.

The speech marked the clearest message from the government so far in supporting businesses of cryptocurrencies that have set up shops in the UK, following industry criticism that the UK’s strict regulatory approach and indifference to the government is hurting innovation.

“We see huge potential in crypto,” Glenn said. “We are not going to lower our standards, but we are going to maintain our neutral technological approach.”

The minister added that the government will examine the possibility of issuing a government debt using distributed ledger technology. He said Chancellor Rishi Sonak had commissioned the Royal Mint to issue a digital collectible item, known as a non-disconnect token (NFT), until the summer as “a symbol of the forward-looking approach we are determined to take.”

The UK crypto impulse comes as companies operating in financial centers like the UK and US increase pressure on governments, regulators and legislators to propose clearer rules and regulations regarding digital assets.

Financial supervisors have had to balance the potential of using crypto tokens for illegal activities against its potential to offer innovative solutions to everything from asset trading to corporate governance.

Signed that some senior policymakers remained concerned about crypto, Bank of England Governor Andrew Bailey warned on Monday that cryptocurrencies were the new “front line” in criminal fraud, adding that the technology had created an “opportunity for a real criminal”.

The UK Treasury has also released coveted plans to regulate stable coin issuers, which are crypto tokens designed to reflect the value of other assets like the US dollar.

One of the Treasury’s proposals is to adapt existing laws governing electronic money, such as funds stored in mobile phone apps, to cover stable currencies, and bring them under the authority of the Financial Conduct Authority. This would require stable coin issuers to hold equal reserves of pounds sterling for the tokens issued, which could not be used for purposes such as loans.

The moves in the crypto policy below Clashes between industry and FCA Around its money laundering licensing regime, which some industry participants said pushes companies to move overseas.

The perception that the authorities are hostile to crypto has raised concerns about the competitiveness of British financial technology, including among some serial MPs from the back bench, at a time when the government intended to step up the industry after the Brexit.

Ian Taylor, CEO of the CryptoUK industry group, which has increased its lobbying for lawmakers in recent months, praised the “change of tone from the government.”

Earlier this year, the government announced it would clean up against misleading crypto advertisements, subjecting it to the same regulation as other financial advertising.

Glenn said the government would “now broaden its perspective” of its work on crypto-regulation, including trading in cryptocurrencies such as Bitcoin, and consult on new rules to create a “world-leading regime for the rest of the market.”

Among the measures announced was an “engagement group” of crypto business executives to meet with regulators, led by Glenn, as well as “crypto sprints” organized by the FCA for private-sector information on regulation and a legal research project on the status of decentralized autonomous organizations.

The government also intends to re-examine the taxation rules for crypto, with Glenn hinting at “targeted” changes in the treatment of decentralized finances and removing the prevention of incentives for UK fund managers to hold crypto in their portfolios.

In addition to encouraging homemade blockchain innovation, Glenn has placed a welcome mattress for offshore crypto players, saying he hopes the UK will be attractive to “companies that do not yet have a tidy base”.

UK unveils measures in bid to become ‘global hub’ for crypto Source link UK unveils measures in bid to become ‘global hub’ for crypto

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