The UK government has drawn up plans for minting its own non-fungible token as a patrt of its strategy towards transforming the country into a “world leader” in the cryptocurrency area.
Finance Minister Rishi Sunak has written to the Royal Mint, which is a government-owned firm that mints coins for the United Kingdom. — “by the summer,” according to City Minister John Glen, who spoke at a fintech event in London.
“There will be more details available very soon,” he added.
According to Glen, the programme is part of a larger government attempt to “lead the way” in crypto. The UK will take a number of initiatives, according to the minister. will take to increase regulatory supervision of digital assets, including proposals to:
Bring some stablecoins into the United Kingdom. Stablecoin issuers and service providers would be allowed to “operate and flourish in the United Kingdom” thanks to a new payment infrastructure.
Consult on establishing a “world-leading system” for regulating the trade of other cryptocurrencies, such as bitcoin.
Request that the Law Commission consider the legal position of decentralised autonomous organisations, or DAOs, which are blockchain-based communities.
Examine how decentralised finance (DeFi) loans and “staking,” which allows crypto users to earn interest on their funds, are taxed.
Create a Cryptoasset Engagement Group, which will be led by ministers and include representatives from UK authorities and crypto companies.
Investigate the use of blockchain technology in the issuance of debt instruments.
“We shouldn’t be thinking of regulation as a static, rigid thing,” Glen said. “Instead, we should be thinking in terms of regulatory ‘code’ — like computer code — which we refine and rewrite when we need to.”
The government previously announced plans to develop a regulatory framework for cryptoassets and stablecoins, according to CNBC.
Stablecoins, or cryptocurrencies whose value is derived from sovereign currencies such as the US dollar, are a rapidly rising but divisive phenomenon in the crypto industry.
Tether, the largest stablecoin in the world, with a circulating supply of over $80 billion. However, it has been chastised for the lack of transparency surrounding the token’s reserves.
Glen said that the government was “widening” its scope to include other areas of crypto, such as Web3, a movement that advocates for a more decentralised internet based on blockchain technology.
“No one knows for sure yet how Web3 is going to look,” Glen said. “But there’s every chance that blockchain is going to be integral to its development.”
“We want this country to be there, leading from the front, seeking out the greatest economic opportunities.”
As policymakers around the world continue to take a closer look at the $2 trillion sector, industry insiders have been demanding for clarity on the United Kingdom’s position on crypto.
President Joe Biden of the United States signed an executive order last month pushing government-wide coordination on crypto regulation. The move was widely regarded as beneficial to the industry.
Meanwhile, politicians in the European Union recently voted against measures that would have jeopardised the future of crypto mining. They did, however, approve new restrictions prohibiting anonymous crypto transfers.
Regulators in the United Kingdom have taken a hard line on digital assets.
The Financial Conduct Authority has turned down the great majority of crypto companies that applied for registration, citing concerns that too many “financial crime red flags” are going unreported.
Last week, the FCA extended a crucial deadline for crypto businesses on a temporary register to obtain full authorization, including Revolut and Copper. Copper has former UK finance minister Philip Hammond as an advisor.
After failing to make it onto the final register, some organisations, including Blockchain.com, B2C2, and Wirex, have been forced to shut down their U.K. crypto activities and relocate offshore. The FCA has only approved 33 companies.
(Adapted from CNBC.com)