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UK sets out to become a global crypto asset technology hub

Updated: Jul 25, 2024
Published: Apr 4, 2022
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The government of the UK is all set to turn the country into a global crypto-asset tech hub as the authorities released a report that "will see stablecoins recognized as a valid form of payment as part of wider plans to make Britain a global hub for crypto asset technology and investment."

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UK to explore Distributed Ledger Technology (DLT)

It is also important to note that the Economic Secretary to the Treasury, John Glen spoke at the Innovate Finance Global Summit, UK wherein he revealed that the authorities aim to take advantage of the DLT which enables users to manage and sync data in a decentralized manner which provides "greater efficiency, transparency, and resilience."

The government of the UK also aims to establish an FMI or Financial Market Structure "’ Sandbox’ that will enable firms to experiment and innovate in providing the infrastructure services that underpin markets, in particular by enabling Distributed Ledger Technology to be tested." The official report from the government also said that:

The government further confirmed that it will initiate a research program to explore the feasibility and potential benefits of using DLT for sovereign debt instruments. 

Stablecoins and DeFi

The UK will also implement regulations when it comes to stablecoins so that they can be used without risks and more efficiently. Furthermore, "the approach will ensure convertibility into fiat currency, at par, and on-demand," said the report confirming that the government aims to bring a "systematic" regulatory policy to the nation. 

It is also important to note that the government of the UK will work on "enhancing the competitiveness of the UK tax system" and also take measures on how to tax DeFi loans and the interests earned from them. Also, the Royal Mint has been commissioned by The Chancellor to mint an NFT this year followed by a two-day ‘CryptoSprint’ in May which will be conducted by the Financial Conduct Authority, which recently issued a warning again crypto ads. The report also added:

The Economic Secretary will establish and chair a Cryptoasset Engagement Group, convening key figures from the regulatory authorities and industry to advise the government on issues facing the crypto asset sector.

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