The proposed bill will task the U.K. Treasury with defining what DSAs are and assign the Bank of England (BoE), Financial Conduct Authority (FCA), and Payments Systems Regulator (PSR) various powers to enforce the rules.
The United Kingdom’s crypto industry has generally welcomed a proposed bill that could include stablecoins and other digital assets under the jurisdiction of local payment regulations. It is, however, unclear how the new regulations will be structured if the bill is passed.
The bill will reportedly be subjected to a complex legislative process and could be slowed down further by the most recent cabinet upheaval.
The bill is slated to be debated in Parliament for the first time in September, with crypto proponents expecting clues from regulators on how they propose to interpret and implement the rules.
James Alleyne, legal counsel at the London-based law firm Kingsley Napley, who counsels crypto firms on compliance, told reporters that for the UK crypto industry to fully understand the new powers and strategies adopted by the various regulators, it will be necessary to wait and see what new regulations are introduced as a result of the bill.
The proposed bill on stablecoin regulations is part of the larger financial services and markets bill that outlines the UK’s post-Brexit economic strategy. The bill also seeks to broaden the scope of current financial rules to include payment-focused cryptocurrencies like stablecoins, which aim to maintain a peg to a fiat currency, typically the US dollar.
The proposed bill will task the U.K. Treasury with defining what DSAs are and assign the Bank of England (BoE), Financial Conduct Authority (FCA), and Payments Systems Regulator (PSR) various powers to enforce the rules.
The U.K. is the latest country to propose subjecting stablecoins to regulations and is partly linked to the collapse of the terraUSD, which saw clients lose about $40 billion in investments.
According to reports, over six experts in the U.K crypto industry have lauded the new initiative, stating that it aligns with the country’s ambitions of becoming a global crypto hub.
“I see this as a key piece of legislation for financial services, which I hope can allow us to make the most of the opportunities of Brexit and to establish an approach to crypto regulation that is right for the UK,” said Lisa Cameron, a member of Parliament and chairwoman of the cross-party group for crypto.
“By bringing stablecoins within the scope of regulation, the bill paves the way for further adoption in the UK, and this will be a key area of focus for parliamentarians as part of our inquiry into the wider sector,” she added.
Policy Makers in the European Union also recently agreed on the Markets in Crypto Assets (MiCA) bill that aims to establish licensing rules for crypto businesses and impose strict requirements for stablecoin issuers that wish to operate in the EU.
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