As informed by a source to CNBC, Britain’s Finance Minister Rishi Sunak will announce the new crypto regime.
The upcoming announcement will focus on stablecoin as The Treasury continues discussions with trade and firm groups.
Furthermore, as the information is not public yet, The Treasury declined to comment, and the four sources familiar with the matter chose to remain anonymous.
Understanding Britain’s new crypto regime
While the details are to finalize, sources told CNBC that the U.K. government is likely to favor cryptocurrency.
Furthermore, the new crypto regime will clarify the sector as it lacked regulation in the past.
Additionally, sources also inform that Treasury officials are keen to unfold the complexities of the crypto market.
Moreover, The Treasury aims to gain in-depth knowledge about stablecoin.
A source informed that the department is discussing with the Winklevoss brothers’ crypto exchange Gemini.
Based on the U.S. dollar, Gemini produces its stablecoin called the Gemini dollar.
Financial stability risks due to Britain’s new crypto regime
Tether is the world’s largest stablecoin circulating supply of over $80 billion, up from $4 billion in the past years ago.
However, stablecoin is also a cause of concern for regulators who worry it can function for money laundering and other illicit activities.
Most importantly, regulators fear the exposure of financial systems to digital currencies and bitcoin.
Additionally, regulators worry it can also function for evading sanctions imposed on Russia.
However, on Thursday, The Bank of England called upon policymakers to expand regulatory frameworks.
The expanded regulatory frameworks limit the threats posed by crypto to financial stability.
Additionally, Sam Woods, BOE Deputy Governor, wrote a letter to various bank CEOs stating “increased interest” from banks and investments forms in “entering various crypto markets.”
The threat of crypto and the announcement of a new regime
Several industry insiders have expressed discontent regarding the lack of crypto regulation from the U.K.
However, the Treasury’s move construes as a response to President Joe Biden’s executive order calling for coordination from different U.S. federal agencies on regulating crypto.
Furthermore, companies like, Blockchain.com, Revolut, and Copper may face a shutdown in crypto activities in the U.K.
The companies may witness harsh measures if they fail to enter the Financial Conduct Authority’s crypto-asset register before March 31.
The harsh measures target crypto businesses not meeting the required anti-money laundering standards.
While 80% of the assessed firms withdrew their application or faced rejection, only 33 companies entered the register.
As Britain announces a new crypto regime, regulations and clarity are near the horizon. While crypto does pose a threat, several restrictions help to combat interference.