UK Treasury Chancellor Rishi Sunak outlined plans for the country’s financial services. Focusing on green finance and financial technology, discussion about central bank digital currencies (CBDCs) and stablecoins is welcomed.
The Government will propose a regulatory approach for relevant stablecoin (privately-issued digital currencies) initiatives – ensuring they meet the same minimum standards of other payment methods – and consider whether central banks can issue their own digital currencies pic.twitter.com/gtlXNRMd4w
— HM Treasury (@hmtreasury) November 9, 2020
The UK is a known pioneer in financial services and technological innovation. In line with this, the Chancellor acknowledges the potential benefits of stablecoins. They will focus on managing the risks to consumers and ensuring financial stability. Hence, a regulatory approach for stablecoin initiatives will be done.
UK Joins CBDC Talks
In fact, the UK is taking the lead role in CBDCs worldwide. The HM Treasury and the Bank of England, in particular, already consider whether and how central banks can issue their own digital currencies alongside fiat.
Significantly, this progressive approach maintains the UK’s reputation as a global financial center. Moreover, it will attract more institutional investors due to its openness to international markets and robust regulatory standards.
Chancellor specifically pointed out that,
Our plans will ensure the UK moves forward as an open, attractive and well-regulated market, and continues to lead the world in pioneering new technologies and shifting finance towards a net zero future.
Sooner than later, global financial service providers will utilize this new mechanism.