UK Government sets out plan to make Britain a global Crypto-Hub

The government announced a package of measures to make the UK a global hub for cryptoasset technology and investment.

UK government has today announced moves that will see stablecoins recognised as a valid form of payment in order to make the country a global hub for cryptoasset technology and investment.

The decision is part of a package of measures to ensure the UK financial services sector remains at the cutting edge of technology, attracting investment and jobs and widening consumer choice. Measures include legislating for a ‘financial market infrastructure sandbox’ to help firms innovate.

The government will also explore ways of enhancing the competitiveness of the UK tax system to encourage further development of the cryptoasset market in the UK. It will review how DeFi loans are treated for tax purposes. The government will also consult on extending the scope of the Investment Manager Exemption to include cryptoassets.

Also, the Economic Secretary will establish and chair a Cryptoasset Engagement Group, convening key figures from the regulatory authorities and industry to advise the government on issues facing the cryptoasset sector.

Furthermore, the Financial Conduct Authority will hold a two day ‘CryptoSprint’ in May with industry participants, seeking views directly from industry on key issues relating to the development of a future cryptoasset regime.

The Chancellor has also commissioned the Royal Mint to create a Non-Fungible Token (NFT) later this summer.

With these measures, the government intends to bring stablecoins – where used as a means of payment – within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.

“It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” Chancellor of the Exchequer, Rishi Sunak said. “We want to see the businesses of tomorrow – and the jobs they create - here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term. This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”

The UK’s vision for being a global hub for cryptoasset technology was set out in a speech by the Economic Secretary to the Treasury, John Glen at the Innovate Finance Global Summit today. He also announced that the UK will proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets.