UK will announce a new crypto regulation plan in the coming weeks, with major focus on stablecoins, CNBC reports.
- CNBC repots citing undisclosed sources that the British Finance Minister Rishi Sunak is expected to announce a new regulatory regime for crypto in the coming weeks.
- According to the report, the announcement will mainly focus on stablecoins, digital assets that derive their value from existing currencies like the U.S. dollar.
- The Treasury has been in discussions with a number of firms and trade groups, including the crypto exchange Gemini.
- Details of the new crypto regulation are still being finalized, however CNBC learnt from the sources that the new regulations are likely to be favorable to the industry.
- The new crypto directives will provide legal clarity for a sector that has so far been mostly lacking in regulation.
- CNBC mentioned that stablecoins have witnessed exponential growth in terms of usage over the past few years, in tandem with rising interest in cryptocurrencies more broadly. Tether, the world’s largest stablecoin, now has a total circulating supply of more than $80 billion — up from about $4 billion two years ago.
- But these stablecoins have also caused concern for regulators more than Bitcoin and other cryptocurrencies. Regulators as well as market participants worry they may not be fully backed by an equivalent amount of reserves, and are being used for money laundering and other illicit activities.
- The move from the UK is being viewed as a response to President Joe Biden’s recent executive order calling for coordination from different U.S. federal agencies on regulating crypto. Several industry insiders and policymakers have bemoaned the lack of similar action from the U.K.
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