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UK Treasury says stablecoins could be used for payments

By:
on Apr 5, 2022
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  • The UK Treasury is planning to accept the use of cryptocurrencies for payments.
  • The institution is assessing the benefits and risks of the use of cryptocurrencies.
  • The UK Finance Minister has also asked the Royal Mint to create an NFT.

The UK Economic and Finance Ministry is paving the way for broader cryptocurrency adoption. The ministry has said that it has plans to change the current regulatory framework to foster the adoption of stablecoins as a payment method.

HM Treasury plans to adopt crypto

In January this year, HM Treasury engaged in a consultation phase to assess the regulatory framework for cryptocurrencies and stablecoins. The institution has said that some digital assets and Distributed Ledger Technology (DLT) could be used to transform the financial sector and offer consumers new ways of interacting and investing.

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While clear benefits could be realized from the cryptocurrency sector, HM Treasury also talked about the risks posed to consumers. It also mentioned the threat posed by crypto to the existing financial systems and market integrity.

In its consultation, the government requested insight on how the UK government can provide a guarantee that the existing regulatory framework was able to capture the benefits and reduce exposure to potential threats     

UK Royal Mint to create an NFT

The UK treasury minister, Rishi Sunak, has also asked the Royal Mint to create a non-fungible token (NFT). The official said that by launching an NFT, the UK could portray a “forward-looking approach” and show determination towards embracing the crypto sector.

The announcement by the HM Treasury failed to specify the image or object that would be adopted for the Royal Mint NFT. Moreover, it did not mention whether more NFTs would be created and whether they would bestow financial benefits. A spokesperson of the Treasury noted that additional details would be provided.

Sunak said he wanted to make the UK a hub for digital assets. “We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest long term.”

Despite Sunak having a positive stance regarding digital assets, the governor of the Bank of England, Andrew Bailey, has remained skeptical. Bailey recently stated that cryptocurrencies were affiliated with scams, given that most people demanded ransom payments in crypto.