When it comes to cryptocurrencies, the United Kingdom (UK) has big plans for the future. To achieve their dreams of making the country “a hospitable place for crypto” will see some cryptocurrencies being regulated.
It’s not going to happen without that regulation in place. There are still fears about how volatile cryptocurrencies can be when it comes to their value. To counter these problems, the UK government wants to introduce stablecoins.
These are cryptocurrencies that are linked to assets such as traditional currencies or gold. This would see a reduction in the volatility that continues to beset cryptocurrencies. Examples of stablecoins are Tether and Binance USD.
There seems to be plenty of plans for cryptocurrencies in the UK. The regulation is possible in the second half of this year. Just which ones will be regulated hasn’t been revealed by the Chancellor Rishi Sunak. It is also interesting how online casinos and betting sites using cryptocurrency will be regulated.
What we do know however is the ambitions that the Chancellor has. His dream is to see more cryptocurrency businesses coming to the UK. With regulation in place, the hope is that the general public will be more willing to deal with cryptocurrencies. That in turn will see crypto companies gaining the confidence to come to the UK and to make long term investments.
UK Financial Services Minister John Glen has also been speaking about the future of cryptocurrencies. He made a keynote speech at the recent Innovate Finance Global Summit. That was held as part of Fintech Week 2022. The MP said that the UK is only second to the US worldwide when it comes to financial technology hubs.
Nearly 50 percent of Fintech unicorns in Europe are based in the UK. 2021 saw the UK gain more investment in that sector than Germany, Sweden, the Netherlands, and France put together.
That’s impressive but more is planned. The Financial Services Minister told the conference: “We think that by making this country a hospitable place for crypto, we can attract investment, generate swathes of new jobs, and create a wave of ground-breaking new products and services.” This he hopes will lead the UK to create a “world-best crypto ecosystem.”
The government is aware that there is criticism of the carbon emission levels that are generated by cryptocurrencies. Mr Glen says that’s something that the government is looking at.
It has also been announced that the Treasury has asked the Royal Mint to create an NFT. This is believed to be being released in the summer. Not too many details are known about what we can expect when it’s released. It’s a new project for the Royal Mint who have been operating for over 1,100 years creating coinage for the UK.
It’s that volatility in the value of cryptocurrencies that needs to be dealt with. Last December saw the deputy governor of the Bank of England, Sir Jon Cunliffe, discussing the matter. He revealed that 0.1% of UK wealth was in digital assets. That’s a figure that is going to continue to rise, especially if the government achieves their aims.
The big fear is that a drop in their value would cause big problems. That’s the last thing the UK government needs to see. They are still struggling to recover from the pandemic and the cost of living is going through the roof.
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