The UK remains committed to becoming the hub of the global crypto industry despite recent negative events in the market. and UK Treasury Secretary for Economic Affairs, Andrew Griffiths, underscored that commitment at a meeting of the UK Parliament’s Finance Committee on January 10.
The introduction of a wholesale stablecoin and financial market infrastructure (FMI) sandbox will be the next step in the process. These elements are included in the Financial Services and Markets (FSM) bill, which will also have his second reading in the Senate on Jan. 10.
Stablecoins could serve as the “first use case for what is likely to be a wholesale payment coin” in the “long run time” leading up to the potential introduction of Central Bank Digital Currencies (CBDC). is high, says Griffiths.
Griffiths defended the work being done on wholesale stablecoins, saying that stablecoins are “here and now” and require immediate action. He pointed out that it is unclear whether CBDC will replace private stablecoins in the market if it is introduced.
According to Griffiths, if a UK retail CBDC is introduced, it will be an anonymized and brokered platform by design.
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An advisory document on the CBDC will be released “in weeks, not months,” followed by another document on broader cryptocurrency regulation. The government will also hold at least six roundtables with the crypto sector this year.
This is “not the government’s position” [crypto-based technology] “Like blockchain technology, current technology cannot solve financial sector problems such as settlement times in a ‘disruptive way’,” Griffiths added.
of @CommonsTreasury contact #crypto assets We will continue with another oral evidence session today. This time it includes Congressman Andrew Griffiths, Secretary of the Economy.#Crypt #Crypto regulation #Crypto research
9:45 am today
Watch the entire inquiry live https://t.co/sXYxzrnNlt pic.twitter.com/ltxK8cTKbo— CryptoUK (@CryptoUKAssoc) January 10, 2023
For retail users, Griffiths drew a clear line between crypto as an investment and crypto as a means of payment. No,” Griffith said.
Crypto-based payment methods are a matter of digital and financial inclusion, but “there is a very strong commitment to continued use and access to cash,” and banks continue to be there. Griffith said:
“Certainly in the current evolution of the market, getting rid of that middleman feels very premature.”
The FSM bill, which could be “completed by Easter,” would also allow the licensing and market introduction of several new payment apps in the FMI sandbox. Griffiths said his fintech use case for crypto-based wholesale could be in “middle office” ledgers and registers for now.
Full regulation of the cryptocurrency market will not be achieved by 2023, Griffiths assured committee members.
Meanwhile, monitoring crypto promotions plays an important role in consumer protection. Consumers can look for the Financial Conduct Authority (FCA) logo on promotions to know they are dealing with a regulated organization. The Treasury Department’s deputy director for payments and fintech, Laura Mountford, told the commission.
In any event, only about 40% of consumers “understand or believe they are buying cryptocurrencies as gambling,” Mountford said, citing FCA oversight.
