United Kingdom’s Treasury will provide a new framework for stablecoins that could “transform the way people store and exchange their money” as per the reports that we have in our latest cryptocurrency news.
United Kingdom’s treasury will put out guidelines on private stablecoins as it believes that the private stablecoins could change the way people handle money if the risks get managed effectively. The bank of England is already researching central bank digital currencies. Today, the HM Treasury put out a statement saying that “new technologies like stablecoins-privately-issued digital currencies could transform the way people store and exchange their money, making payments cheaper and faster.”
Private stablecoins like Tether, Circle, and Coinbase-backed USDC as well as the Gemini dollar, are a tricky business. Tether once claimed that the cryptocurrency which maintains the one-to-one peg with the US dollar was 100% backed by US dollar reserves. After the probe, it conceded that it was only 74% backed. With that and more, detailed in the ongoing investigation by the New York Attorney General which alleged that Tether’s sister company Bitfinex used the stablecoin company with the way to cover hundreds of millions of dollars in debt.
Aware of the difficulties that could arise from the privately-issued stablecoins, the chancellor of the Exchangequer Rishi Sunak, tweeted that the Treasury will “publish a consultation to ensure new privately-issued currencies, stablecoins meet the high standards we expect of other payment methods.” Sunak continued saying that it would “harness the potential benefits of stablecoins, whilst managing risks to consumers and financial stability.”
We’ll publish a consultation to ensure new privately-issued currencies, stablecoins, meet the high standards we expect of other payment methods.
— Rishi Sunak (@RishiSunak) November 9, 2020
The treasury noted that the Bank of England and the treasury are still considering “whether and how central banks can issue their own digital currencies as a complement to cash.” These could compete with the private stabelcoins or help people transition to a cashless society. The Bank of England’s governor, Andrew Baily said to his audience at the Brookings Institute that “Stablecoins can offer useful benefits and they can further reduce frictions in payments, by potentially increasing the speed and lowering the cost of payments.”
As reported previously in our crypto news, The HM Treasury is now aiming for a proposal for better consumer protection for users of cryptocurrencies and similar products. The documents that we have today show that the city minister John Glen published a proposal to “strengthen protections around the promotion of financial products and crypto-assets.” Glen is a management consultant who is now a politician who has been in the British Parliament since the 2010 election.
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