After the US move, the UK seeks to regulate crypto, creating a government signal
Following efforts by the US and others to address cryptocurrency standards, UK officials said this week that they want Britain to lead the world and create its own government-backed digital signal for international trade.
“We want this country to be a global hub – the best place in the world to start and scale crypto companies,” he said. Seán GleannMP and UK Secretary of State for the Treasury.
Glen’s comments came during a keynote address at the World Financial Innovation Summit during Fintech Week 2022. It also affirmed that the United Kingdom is the leading European hub for financial technology (Fintech), “second only to the United States in the world”.
The Minister said work was underway to regulate stablecoin and further develop a regulatory framework for digital assets. He said that the Chancellor of the United Kingdom had asked the Royal Mint to non-mungible signal (NFT) to be issued this summer.
NFTs are digital tokens that represent data, media, or valuable assets, such as real estate or souvenirs. The intrinsic value of NFTs varies based on what they stand for, making their value highly subjective. However, the popularity of NFTs has increased in recent years.
Last year, NFTs reached $ 44 billion in sales.
Gov.UKJohn Glen, MP and UK Secretary of State for the Treasury.
“Almost half of Fintech unicorns in Europe are based in the UK. And last year, the sector attracted more investment than France, Germany, Sweden and the Netherlands combined, ”said Glen. “We believe that by making this country a welcoming place for crypto, we can attract investment, generate many new jobs, and create a wave of brand new products and services.”
Leaders of Innovate Finance, an industry body representing the UK Fintech sector, praised the government ‘s acceptance of crypto.
Innovate Finance CEO Janine Hirt said Glen’s efforts have resulted in a comprehensive effort to work with regulators to bring stablecoin into the control space, created a more flexible “beta test” approach to regulation, and updated the tax base and legal for digital and decentralized assets. finance (DeFi).
Unlike traditional financial networks, where centralized electronic messaging platforms are used to transfer funds between banks and businesses, DeFi uses secure distribution ledgers or peer-to-peer networks, such as blockchain, to transmit digital money and NFTs. DeFi abolishes banking regulation and the clearing and settlement media to move funds almost immediately across borders.
Russ Shaw, founder of Tech London Advocates and Global Tech Advocates – an advocacy network of more than 10,000 technology leaders and 45 working groups – called the latest UK efforts a “bold step in the right direction.”
“It shows that the UK is leading the way on the emerging technology curve,” Shaw said by email. “There needs to be some degree of control for digital assets to be accepted worldwide, taken seriously and widely accepted.
“We need to be forward thinking in our approach to digital assets, and it is vital that the private sector has a place at the table in discussions with regulators to get the balance right,” Shaw said.
Late last month, U.S. lawmakers joined other government officials and called on the U.S. to do so Create a Central Bank Digital Currency (CBDC) to ensure it does not lag behind other nations. The legislators introduced a bill that would allow the U.S. Treasury to create a digital dollar – a virtual representation of the US dollar – that could be transmitted over DeFi networks.
In general, there are three types of digital currency:
- Cryptocurrencysuch as bitcoin and Ethereum, created and traded on blockchain distributed ledger (DLT) technology;
- Stablecoinsuch as Tether and USD Coin, backed by fiat currencies like the US dollar;
- Central Bank Digital Currency (CBDC), or fiat currencies issued by central banks in digital form and are not categorized as cryptocurrency.
The recent outpouring of interest in the creation of a national electronic dollar is evidence that the United States is playing to catch up with other nations already piloting their own central bank digital currencies.
“As payment technologies and digital currency continue to grow rapidly with Russia, China, and over 90 countries worldwide Already researching and launching some form of Central Bank Digital Currency, it is vital that the US stays globally leading the development and regulation of digital currency and other digital assets, “said Representative Stephen Lynch (D -Mass), said in a statement.
451 S&P Research Global Market IntelligenceA recent survey by 451 Research found that Millennials lead the next generations using cryptocurrencies, closely followed by Generation Z-ers.
According to the US-based think tank, the Atlantic Council, among the nations with the four largest central banks, the UK is ahead of the US in creating standards and regulations for crypto. Both nations, however, continue to dominate the other countries that are already using or piloting digital signs. For example, China is expanding its retail CBDC pilot program – the e-CNY – and at the same time a ban on the use of cryptocurrency. Nigeria launched its CBDC, the e-Nairain October 2021 for retail use.
The consequences of falling behind other nations could be serious for the UK and the US, as those in charge of the charge could set the technological and policy standards for the cross – border use of digital currencies for the world. fad.
One problem with the lack of international standards and regulatory oversight is that criminal groups can use cryptocurrencies for unfavorable activities, such as money laundering and human trafficking. For example, in the face of increasing sanctions following the invasion of Ukraine, Russia probably uses cryptocurrencies continue anonymous cross – border commerce.
“It’s still a show in the wild west and we need regulatory clarity to control it,” said Avivah Litan, a distinguished analyst and vice president at research firm Gartner. “Regulatory agencies have differing views on cryptocurrencies.”
Since January 2020, crypto-asset firms operating in the UK have been subject to Money Laundering Regulations, and the country recently consulted on the Financial Action Task Force’s Travel Rule on the implementation of crypto-asset transfers, by according to Glen.
“We have a very strong system in place, and we will not compromise on those high standards,” said Glen.
The UK Financial Conduct Authority (FCA), a regulatory body, announced this week that it will organize the first of a series of “crypto-sprints,” or research efforts, next month involving scores of industry experts .
The “sprints” will inform the FCA’s policy thinking, and enable participants to come up with some of the legal, technical and regulatory challenges facing the industry, and then come up with practical solutions “that will bring us, the Government , proceed as fast as we can, ”said Glen.
“We will also call it the Financial Market Infrastructure Sandbox… for which we are making very good progress,” Glen told him.
The Sandbox – run by the Bank of England and the FCA – will enable businesses to experiment and innovate in providing the services that underpin the markets. It will also enable them to test new technologies that can transform financial markets by delivering greater efficiency, improved liquidity, enhanced transparency, and greater security, Glen said.
“We intend to have this in place next year,” he said. “And if he teaches us that we need to update the relevant legislation, we will do the same.”
Copyright © 2022 IDG Communications, Inc.
After the US move, the UK seeks to regulate crypto, creating a government signal
Source link After the US move, the UK seeks to regulate crypto, creating a government signal
