From WikiNews on Monday, January 16, 2023
Andrew Griffith, Economic
Secretary to HM Treasury, told members of the United Kingdom House
of Commons Tuesday the government was considering a "digital
pound", with public consultations on the attributes and regulation
of digital assets expected in the coming weeks.
Speaking before Parliament's Treasury
Select Committee, Griffith reported the government was "a long way down
the road [...] to establish a regime for the wholesale use, for payment
purposes, of stablecoins", cryptocurrencies less susceptible to price
fluctuations by being pegged to traditional assets.
While affirming
commitments for the UK to become a cryptocurrency hub, Griffith said
creating regulations for a digital pound would be "a long lead-time
activity."
Griffith told the
Committee the first use of a digital pound would likely be for settling
financial transactions wholesale, but suggested public policy considerations meant
a private, fiat-based stablecoin could probably do the job first.
Nevertheless, he said:
"We have got to get them [public policy issues] right. I would rather be
right than be first".
Griffith expressed the
desire that a regulatory regime, Britain's first for crypto assets, would be
included in the Financial Services and Markets Bill, which is being debated in
the House of Lords. He said embracing "potentially disruptive game-changing
technology" could "challenge but also turbocharge" the
UK's fintech and financial industries.
Digital currencies are
being explored by central banks worldwide, with China testing a
digital yuan in major cities like Beijing and Shanghai,
and the European Union (EU) due to publish draft legislation to
establish and regulate a digital euro later this year.
The European
Central Bank is due to complete its two-year investigation phase for a
digital euro in July, when it will be followed by three years of
implementation.
Consumer protection has
come under scrutiny during the 'crypto winter' precipitated by a fall in the
value of Bitcoin and the collapse of major exchange FTX. The EU has previously laid out the world's
first comprehensive ruleset for regulating crypto markets, which may enter
effect in 2024. Griffith indicated the UK's rules could be broader to cover
decentralised finance, and that the public consultation over regulating crypto
assets would be part of a "research and exploration" phase with the
government and the Bank of England.
This includes "at
least" six discussions with industry members to "expose us as
regulators and decision makers" and uphold Britain's "strong
financial reputation".
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