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Title: The U.K market bill sent to British Parliament to Establish Crypto as a Financial Asset 

This week, regulators in the UK will engage with Parliament to discuss how stablecoins can be used as a payment method tool. This engagement is long overdue and part of the ongoing financial services and market bil discussions, which aim to strengthen the U.K financial system after Brexit. 

Brexit is the term given to the United Kingdom’s departure from the European Union. According to reports, the U.K government has planned for cryptocurrency to be a part of a larger plan to make the economy more competitive post-Brexit. In April, the U.K. Treasury announced a set of plans to help make the country a hub for cryptocurrency around the world. The announcement said that there would be new rules that would make it safe for people to pay with stablecoins.

Earlier this year, the big decline in the  price of cryptocurrencies and the departures of a finance minister who liked cryptocurrencies, Rishi Sunak, and a senior treasury official, Jon Glen, threatened to change the plans.

However, the collapse of the $18 billion stablecoin terraUSD in May prompted the Bank of England, the U.K.’s central bank, to publish a consultation on its plans to regulate similar crypto assets and to suggest that the bank be given the authority to appoint trustees to oversee insolvency procedures for failed stablecoin issuers.

Earlier this month, deputy Governor Jon Cunliffe of the Bank of England,  hinted that crypto regulations might be delayed because of the cabinet shuffle, but he promised that stablecoin rules would be in place before the summer break in August.

In his first speech as finance minister on Tuesday, Nadhim Zahawi talked about the new bill. He said that the framework “reinforces the U.K.’s position as a leading center for technology as we safely adopt crypto assets.”

Are Stable Coins Profitable?

Centralized stablecoins like USDT (Tether) and USDC make money the same way traditional banks do: by lending and investing. They do this through fractional reserve banking, in which only a small portion of deposits are backed by real cash that investors can withdraw. 

Stablecoin issuers work under the assumption that not everyone will exchange their stablecoins for dollars at the same time. This frees up money that can be used to invest.

As a user, you’ll also have to pay fees when you exchange fiat money for USDT or withdraw USDT in the form of fiat money . The fee is 0.1 percent, which doesn’t sound like much, but the fees start at US $1,000 for a minimum withdrawal or deposit of 100,000 USD. This also makes people less likely to make small redemptions.

Please note that not all platforms you register with give you the opportunity to trade with stable coins. Before you decide on a cryptocurrency exchange or trading tool make sure you check the key features and whether it provides you with the opportunity to trade with stable coins. For example, in this Bitcoin Code review, it mentions that the trading tool allows users to diversify their assets through trading with crypto and other stable coins. Make sure you don’t miss this important detail. 

The U.K. market bill wants to classify cryptocurrencies as digital payment assets (DSAs) to give their owners a “digital representation of value or rights”. This will also provide a clearer framework for how stable coins work. 

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