Digital Pound under Consideration by UK Treasury
The United Kingdom is actively considering the implementation of a digital pound, as it continues to strive toward becoming a leading hub for cryptocurrency, according to a government representative. The official also emphasized the need for British authorities to regulate transactions involving stablecoins.
The digital pound would be linked to traditional currencies and assets and could be used alongside cash and bank deposits by households and businesses.?
Economic Secretary to the Treasury Andrew Griffith informed the Treasury Select Committee that he aims to establish a framework, as part of the Financial Services and Markets Bill currently under discussion in Parliament, to encourage the widespread use of stablecoins. He stated, "I want to see us establish a regime for the wholesale use for payment purposes of stablecoins."?
Griffith also emphasized the importance of embracing technology that could be disruptive, especially given the country's thriving fintech and finance industries.
Digital currencies are also being explored or created by central banks around the world. For example, China is at the forefront of digital currency development and is currently testing the digital yuan in major cities such as Beijing, Shanghai, and Shenzhen. The European Central Bank (ECB) began research on introducing a digital euro in July 2021 and will proceed with a three-year implementation phase.
The sharp drop in the value of Bitcoin and other cryptocurrencies, referred to as the "crypto winter," has led to questions about the stability of any cryptocurrency. This has also raised concerns about potential policy issues that need to be addressed.?
Andrew Griffith's statements come in the wake of last year's slump and the collapse of large market players such as crypto exchange FTX. Consumer protection in the crypto market is under scrutiny during this crypto winter.
Officials will hold a public consultation about the Financial Services and Markets Bill to establish a viable implementation path for the use of stablecoins for payment.?
CBW - External Analyst
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