*Despite 'crypto' becoming a widely-used term to describe digital assets, not all such assets are encrypted, which is why we often refer to blockchain linked digital assets (BLDAs).
Simon Cohen, Managing Associate at ONTIER, responded to the HM Treasury's announcement on Monday 4th April 2022 that they plan to legislate stablecoins, where used as a valid form of payment, within the payments regulatory perimeter.
This is part of wider plans to make Britain a global hub for digital asset technology and investment following the Chancellor's vision for the future of the financial services sector outlined in July 2021, and the subsequent consultation on digital assets and stablecoins.
“We applaud Mr Sunak for recognising the importance of rigorous regulation in the digital currency space. However, the attraction of a non-fiat currency is its independence from any one government-controlled financial system – and stable coins, by definition, are pegged to an existing currency. It’s not difficult to see why a Chancellor would favour this linked form of digital asset with inbuilt checks against volatility but, in reality, it’s just another variant of the same thing – government controlled currency. The only true answer to a widely-adoptable digital currency is a regulated, cheap, secure and immutable ledger system, operated independently according to a fixed protocol – but one that is designed for everyday use rather than simply a store of value that fluctuates wildly according to hype and demand.”
Read the full article: "Crypto specialists cautiously welcome regulation plans"
Read the full GOV.UK news story: "Government sets out plan to make UK a global cryptoasset technology hub"
For all questions regarding the topics raised above, please contact him or a member of our team of digital asset legal experts.