Crypto: UK government to bring stablecoins into payments system

The UK government's economic secretary to the Treasury John Glen says the UK is open for business when it comes to crypto innovation.

The United Kingdom's government will soon bring in legislation to embed stablecoins, crypto assets pegged to other currencies, into its payment systems.

John Glen, economic secretary to the Treasury, unveiled the plans today at Innovate Finance 2022, by emphasising that the underlying technology of cryptocurrencies such as Bitcoin offered a wide ranging variety of benefits to traditional financial markets.

"We see enormous potential in crypto," Glen said.

“I can confirm that will be legislating to bring certain stablecoins into our payments framework creating the conditions for sustainable issuers and service providers,” he added. 

Stablecoins offer the possibility of helping to better bridge crypto and fiat by reducing the extreme volatility associated with the most well-known coins such as Bitcoin and Ether.

More broadly, Glenn wants the UK to become a leading global crypto hub, announcing that the UK will proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets. This would enable data to be synchronized and shared in a decentralised way to potentially achieve greater efficiency, transparency and resilience.

The government will legislate to establish a financial market infrastructure (FMI) ’Sandbox’ that will enable firms to experiment and innovate in providing the infrastructure services that underpin markets, in particular by enabling Distributed Ledger Technology to be tested. The government also further confirmed that it will initiate a research programme to explore the feasibility and potential benefits of using DLT for sovereign debt instruments.