The Treasury’s decision to begin regulating selected ‘stablecoins’ and consult on expanding the number of currencies it finds acceptable means it is as finally lining up its ‘crypto-ducks’, according to a specialist in the sector.
Katharine Wooller, pictured, managing director at crypto wealth specialist, Dacxi, said this is something the UK industry has long felt inevitable.
“The UK has long been an entrepreneurial hub for financial services and fintech, which annually create billions in invisible earnings with a concomitant tax rake to the exchequer,” said Ms Wooller.
“As such it would seem reasonable to assume that the prospect of Decentralised Finance (DeFi), which is entrepreneurial finance on a global scale, would be something the UK should naturally want its share of.
“Yet rather than seeking ‘skin in the game’, the enthusiasm for DeFi and cryptocurrencies has been tepid. There has been talk of a Central Bank Digital Currency (CBDC), which has engagingly been referred to as ‘Britcoin’, but the UK is well behind the curve.”
It is estimated that 80% of the world’s Central Banks have CBDC projects. Europe has already pledged that by 2024 there will be new rules to make cross-border payments quicker and cheaper through the adoption of blockchain technologies.
Ms Wooller added: “Even now the Treasury, beset by what the crypto industry refers to as FUD – fear, uncertainty and doubt – and worried about destabilising the economy, may be making the wrong call, with regard to stable coins.
“Arguably, low volatility stablecoins, which the entire domestic economy could easily adopt whilst binning the pound, are a much greater threat to sovereign stability than the more volatile coins. Rishi Sunak’s team may be shooting themselves in the foot.”