- The UK government may have been drawn to stablecoins because they provide rapid, low-cost, and borderless transactions. This enables users to conduct worldwide transactions quickly with individuals and businesses without having to convert currencies into local currency.
- If everything goes according to plan, increased engagement with the sector might provide a much-needed boost to the UK economy.
- Stablecoins are backed by other assets, whereas Bitcoin’s value is solely determined by levels of faith and demand. Traditional currencies (typically the US dollar) are most commonly associated with this, however, some are linked to commodities such as gold.
Rishi Sunak, the British chancellor, stated his goal to make the UK a global center for crypto-assets technology in a hectic start to April 2022. Simply put, he wants the country to be a desirable location for cryptocurrency businesses to operate. For the government, this necessitates striking a delicate regulatory balance between preventing financial crime and protecting consumers while still allowing cryptocurrencies to thrive.
Country’s Financial Structure
If everything goes according to plan, increased engagement with the sector might provide a much-needed boost to the UK economy. Following US and other initiatives to address cryptocurrency standards, UK authorities announced this week that they want the country to take the lead and create their own government-backed digital token for international trade.
We want our country to be a global hub – the best site in the world to establish and build crypto-companies, said John Glen, the UK Treasury’s Economic Secretary.
Glen made his remarks during a keynote lecture at Fintech Week 2022’s Innovate Finance Global Summit. He also claimed that the United Kingdom is Europe’s premier financial technology (Fintech) center, second only to the United States internationally.
Stablecoin is being regulated, and a more comprehensive regulatory framework for digital assets is being developed, according to the minister. The UK Chancellor, he added, has instructed the Royal Mint to design a non-fungible token (NFT) that would be released this summer.
NFTs are digital tokens that can be used to represent data, media, or precious assets like real estate or memorabilia. NFTs have a wide range of intrinsic value depending on what they represent, making their worth very subjective. However, in recent years, the popularity of NFTs has skyrocketed.
Of all, it’s early days, and many central banks and economists aren’t sure what role cryptocurrencies should play in a country’s financial structure. Sunak’s plans, on the other hand, included several intriguing recommendations, such as reducing tax obstacles and collaborating with the Royal Mint to build a non-fungible token (NFT).
The plan to put a specific type of cryptocurrency, known as stablecoins, within the ambit of existing UK banking regulations was the most important component. Stablecoins are usually seen as the safer end of the market, as they replace the known volatility of other cryptocurrencies such as Bitcoin with something more stable.
Trustworthy Means Of Trade
Stablecoins are backed by other assets, whereas Bitcoin’s value is solely determined by levels of faith and demand. Traditional currencies (typically the US dollar) are most commonly associated with this, however, some are linked to commodities such as gold. In either case, the goal is to keep the value of stablecoins as close to constant as possible, making them more valuable as a trustworthy means of trade.
The UK government may have been drawn to stablecoins because they provide rapid, low-cost, and borderless transactions. This enables users to conduct worldwide transactions quickly with individuals and businesses without having to convert currencies into local currency.
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Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/04/16/the-uk-government-intends-to-control-cryptocurrency/