Speculation is being made that the UK government will be revealing plans to regulate the Cryptocurrency market, which mainly will be concentrating on a fast-growing type of token known as stable coins. The British Prime Minister is yet to officially make this announcement but, certainly, he will officially address it in the forthcoming week, signaling a new regulatory regime for Cryptocurrency. According to sources, they prefer to be Anonymous pending the time the News breaks into the limelight. The treasury has refused to comment about this when asked about it, Details of the plan are however been finalized and it is said that this move will be of immense positivity and value to the industry, providing legal clarity for a sector that has so far been mostly lacking in regulations.
The Treasury Official has taken a step in providing to learn and understand the complexities of the Cryptocurrency market and so-called stable coin, digital assets that gain their values from known currencies like the US Dollars. There have been a mutual understanding and positive discussion with several firms and trade groups which include the Winklevoss brother’s Crypto exchange Gemini. Gemini issues its own stable coin known as Gemini Dollar, which is placed to the US Dollars.
This stable coin has seen tremendous growth when talking about its usage over the past few years with the fast-growing interest in the Cryptocurrency market. Currently, the world’s largest stable coin has a total circulating supply of more than $80 billion estimated at about $4billion two years ago. But this has been of great concern for the regulator, who feels that they might not be fully backed by an equivalent number of reserves and are meant to launder money and engage in various illicit activities. Regulators have however shown their concerns and worries over possible exposure of the financial system to Bitcoin and various digital currencies as well as their core use for escaping sanctions imposed on Russia amid the ongoing invasion and war in Ukraine.
A VIEW OF THE FINANCIAL STABILITY RISK
The bank of England has proceeded to call for policymakers to expand regulatory frameworks to reduce the high risk posed by Cryptocurrency to financial stability. The Deputy Governor of the Bank of England Sam Woods wrote a letter to various bank CEO’s stating that there has been “Increased interest” from banks and various investment organizations in entering the different Cryptocurrency markets. The Treasury’s moves are being evaluated as a response to the president’s (Joe Biden) executive order calling for organizations from different states in the US federal agencies on regulating cryptocurrencies which some industries have condemned the lack of similar actions from the United Kingdom.
Companies such as BlockChains.com, Revolut and Copper could be forced to shut down their Crypto operations in the United Kingdom. Failure to make it into the financial conduct authority’s Crypto Assets register in time for a March 31 deadline. This means quite a high number of Crypto businesses are not meeting the stated anti-money laundering standard. So far about 33 companies have made it to register remaining more than 80% of firms reached out to by the regulator have either withdrawn their application or been rejected.