It has been 4 months since the announcement made by the UK government that the country is planning to become a global hub for cryptocurrency investors and users. The government wants to introduce regulations of several stablecoins, issue its own CBDC, and even start minting NFTs. The proposal does not sound like an empty promise, but the lack of details and examples of the technology is concerning.
The intention is quite clear
John Glen, Economic Secretary to the Treasury, laid out his vision of the future of the nation in the global economy during his speech at the Global Summit dedicated to financial innovations. The first and foremost thing is regulating stablecoins, tokens pegged by national fiat currency. Currently, the most popular ones are Tether (USDT) and Bitcoin Cash (BUSD). According to John Glen, it must be regulated by the FCA.
Another important aspect of the outlined approach is to review taxation regarding crypto assets. Loans issued by DeFi platforms will be also reviewed because lenders often make a profit on loaned funds. It could be possible that the government itself will be using blockchain technology to manage debt. The last important plan of the government is to use various blockchain platforms and cryptocurrencies to pay for imported goods.
The latter is already possible. For example, the Iranian government started using BTC and ETH to pay for some critical imports to avoid international sanctions.
Currently, all these plans are just plans. The UK government continues its work to create a functional framework within which their ideas about implementing cryptocurrencies in their economies could be turned into reality. However, the lack of any substance in the ongoing effort is a sign of an unfocused and inefficient approach to developing tools necessary to regulate crypto.
The UK is still ahead of many countries
The developed world has been slow to adopt cryptocurrencies or even start regulating them. The US is making bigger steps toward stronger regulation, but the vast majority of countries in the western world are not that interested in adopting before their neighbors. If the UK’s effort will start taking form, it may encourage other economies to follow their lead.