UK to Get Stablecoin and Royally-Minted NFT

Chancellor Rishi Sunak calls the plans innovative, and says they will help make the UK a "global" hub for cryptocurrency innovation

Ollie Smith 4 April, 2022 | 6:55PM
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Rishi Sunak

The UK will include "stablecoin" within its regulatory perimeter and launch a non-fungible token (NFT) via the Royal Mint, the Treasury announced today.

In an apparent bid to make the UK a competetive marketplace for cryptocurrency and a secure location to use distribution ledger technology as the foundation for everyday payments, the chancellor today announced a new "financial market infrastructure sandbox" and Financial Conduct Authority-led "cryptosprint".

"It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country," Sunak said.

"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."

Stablecoins are cryptoassets typically pegged to a "fiat" currency (such as the dollar). They are designed to maintain a more stable value, amid concern that other crypto products are simply too volatile to be viable for day-to-day use.

"With appropriate regulation, they could provide a more efficient means of payment and widen consumer choice," the Treasury said.

Legislation will now be drafted to include stablecoins within the payments regulatory perimeter. In addition, the chancellor has tasked the Royal Mint with launching a non-fungible token (NFT) later this year. 

From a Financial Conduct Authority perspective, it remains to be seen whether wheels will move quickly on its cryptosprint, due to take place 10-11 May.

Historically, the regulation of cryptocurrencies has not fallen under the FCA's remit, though it does have oversight and ultimate authority over certain investment products that can grant investors exposure to them – including ETFs and derivatives. Last month, however, the regulator began its search for the head of a new crypto department.

"This two-day hybrid event will bring industry experts together to explore how the evolving world of cryptoassets could be regulated within the UK," the FCA said of the sprint.

"Participants will collaborate intensively on key issues relating to the development of cryptoasset regulation, and the findings from the exercise will help to inform future policy decisions."

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Ollie Smith  is editor of Morningstar UK