United Kingdom Treasury To Issue New Recommendations
The United Kingdom Treasury (Her Majesty’s Treasury – HM Treasury) will develop and provide new guidelines for stablecoins, a way of storing and exchanging digital currencies by the public.
The Kingdom’s Treasury will publish new guidelines for the use of stablecoins, as it believes that the innovation requires a change in money circulation and risk management. The Central Bank of England is researching and analyzing the use of CBDC digital currencies. Her Majesty’s Treasury issued a statement saying that “ new technologies such as stablecoins and other private digital currencies have the potential to change the way people store and exchange money, making payments cheaper and faster . ”
Stablecoins, USDC / USDT backed by Tether, Circle, Coinbase, and the Gemini dollar require understanding in circulation. Tether is a cryptocurrency, pegged to the US dollar 1: 1, 100% backed by US $ reserves. However, a detailed check showed that only 74% supported him. This and more is detailed in an ongoing investigation by the New York attorney general, who claimed that “ Tether subsidiary Bitfinex used the stablecoin company to cover hundreds of millions of dollars in debt . ”
Aware of the difficulties that can arise with privately issued stablecoins, Exchange Chancellor Rishi Sunak wrote: “ The Treasury will issue guidelines to ensure that stablecoins meet all the requirements and standards that we expect from new payment methods . ” Rishi Sunak also said that he is “ accepting the potential benefits of stablecoins in managing risk and financial stability for users . ”
The Kingdom’s Treasury and the Bank of England are looking at the prospect, with the central bank’s ability to issue and integrate its own digital currency as a complement to fiat currency. CBDC is able to compete with private stablecoins and help society in the transition to cashless payments. The Kingdom’s Treasury strives to develop guidelines for the best user protection when using cryptocurrencies and similar products.
In the words of Bank of England Governor Andrew Bailey: – “ Stablecoins have many advantages and the ability to reduce payment friction by increasing the speed and reducing the cost of payments. ”