The UK is considering launching a digital pound as it remains committed to becoming a cryptocurrency hub, a government official has indicated. British authorities should also regulate stablecoin payments, according to the official.
UK prepares to start consultation on digital pound currency
The executive branch in London is considering the introduction of a digital version of the national currency, Treasury Economic Secretary Andrew Griffith told lawmakers, the BBC reported. A public consultation on the attributes of a digital pound will be launched in the coming weeks, he said, speaking before the parliamentary Treasury Select Committee. Quoted by Reuters, he also emphasized:
The query will say that this is an if and not a when. We are not totally in the inevitability of doing this.
A digital pound raises many public policy issues, and the government has to “get them right,” Griffith said. He addressed concerns that a state-backed currency could erode privacy, insisting that his design would not allow authorities to track individual transactions beyond measures targeting crimes like money laundering.
Griffith further explained that the first use case for a central bank digital currency (CBDC) issued by the Bank of England would likely be in wholesale deals, but conceded that a privately issued fiat-backed stablecoin would “probably come first.”
“I want us to establish a regime, and this is within the FSMB, for the wholesale use for payment purposes of stablecoins,” the minister added, referring to the Financial Services and Markets Bill, which is currently being debated in Parliament. British.
UK May Adopt Broader Crypto Regulations Than EU
Andrew Griffith also revealed that another consultation will be launched on the UK’s regulatory approach towards crypto assets in general. While the EU has already agreed a comprehensive set of rules for the market that is expected to come into force in 2024, the minister noted that UK regulations could go even broader and include decentralized finance.
“We want the right regime, operated in the right way, with the right balances,” he told committee members while promising to hold multiple roundtables with industry participants as part of the discussions.
Andrew Griffith’s remarks come after last year’s plunge in the valuations of major cryptocurrencies such as bitcoin and following the collapse of large market players such as cryptocurrency exchange FTX. Amid an ongoing crypto winter, consumer protection in the space has come under scrutiny, the reports noted.
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