UK government will regulate stablecoins according to the recently published Financial Services and Markets Bill
The British regulators saved a special place for stablecoins in the Financial Services and Markets Bill introduced to Parliament on 20 July 2022. Per new rules, any issuer of stablecoins used for payment must now seek a licence from the Financial Conduct Authority (FCA). It is the first time that the UK’s licensing policies apply specifically to a crypto asset.
Furthermore, the bill is one of the first major financial regulatory initiatives implemented since the UK left the European Union. It seizes the opportunities of EU Exit, tailoring financial services regulation to UK markets. Another essential legislative effort that will affect fintechs is the UK’s AI Rulebook. This guideline details the nation’s strategy for imposing ethical standards on artificial intelligence usage.
The government has previously said crypto initiatives will play a part in the country’s post-Brexit strategy to increase economic competitiveness. Introducing rules for using stablecoins as payment means should reinforce the UK’s position as a leading centre for innovation and technology.
As the collapse of the $18 billion stablecoin terraUSD showed, investors need some legal protection in the crypto industry. Therefore, creating a safe crypto trading environment nationwide raises approval among fintechs and crypto asset providers. Earlier, the Bank of England proposed to appoint administrators to oversee insolvency procedures for failed stablecoin issuers.