Treasury plans to focus on regulation of stablecoins rather than the entire cryptocurrency industry, due to the threat of private companies dominating the payments sector.
UK Treasury Secretary for Economic Affairs John Glen said the government will focus primarily on regulating stablecoins, not the entire cryptocurrency industry. He referred to the threat of competition in the event of the dominance of private stablecoins in an emerging market.
“We need to manage competition risks. Some firms have the ability to quickly dominate and crowd out other players thanks to their ability to scale and connect to existing online services. We believe the need to intervene in the broader cryptocurrency markets is less urgent, ”Glen said at the City & Financial conference.
He added that the UK will not be stifling innovation and protectionism when it comes to leveraging the distributed ledger technology that underpins cryptocurrencies.
“We have a unique opportunity to make tremendous strides in improving the efficiency of financial services and ultimately benefit consumers and the economy as a whole,” he said.
At the same conference, a spokesman for the UK’s Financial Conduct Authority (FCA) stated that it was not advisable to transfer the existing rules on electronic money to stablecoins, since some of them are supported by multiple currencies or other assets.
“Electronic money regulation is not ideal for cryptocurrencies,” said Alex Roy, head of FCA distribution policy.
Recall that recently the chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov, announced the need to amend the law on CFA in order to clarify the concepts of cryptocurrencies, stablecoins and the digital ruble. In addition, the Central Bank of Thailand announced that it will issue rules to regulate stablecoins this year.
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