The United Kingdom Parliament has drafted the Financial Services and Markets Bill, which includes a waiver of certain EU regulations, insurance changes, and a statutory framework for regulating stablecoins.
The new U.K. bill establishes a regulatory framework for using assets based on distributed ledger technology (DLT) to make stablecoins a means of payment in the United Kingdom. Nadhim Zahawi, Chancellor of the Exchequer, made the announcement.
The preparation of the regulatory framework for the cryptocurrency market in the U.K. began in March of this year, when the Bank of England published a report on financial stability. Officials started talking about adopting stablecoins as the country’s legal tender and investment vehicle as early as April. Even after Terra collapsed, Her Majesty’s Treasury did not abandon the initiative, but only excluded algorithmic stablecoins from the bill.
The bill aims to expand Britain’s outdated banking and financial services laws so as to include the regulation of assets based on DSA (digital signature algorithm) in the legislative framework. Thus, the law spells out the powers of Her Majesty’s Treasury as the chief regulator, which involve control over:
- DSA-based payments;
- DSA service providers;
- recovery procedures for DSA providers in the event of bankruptcy.
As appropriate, the Financial Conduct Authority (FCA), the Bank of England, and other government agencies will serve as regulatory advisers.
The bill will be finally passed after approval in the House of Commons and the House of Lords. It will be another step toward realizing the United Kingdom’s ambitious plans to become a cryptocurrency power.
