UK bill to regulate stablecoins as means of payment

What

The UK Treasury announced yesterday it will pass legislation to clarify stablecoin regulation for payments 

Why

The Financial Services and Markets Bill will replace existing EU laws and grant the government new powers to oversee regulators

What next

The bill is undergoing its second reading today before Parliament closes for its Summer recess tomorrow

The story

Chancellor of the Exchequer, Nadhim Zahawi, said the bill will “reinforce the UK’s position as a leading centre for technology as we safely adopt crypto assets.”

Since the UK left the EU in 2020, the EU has introduced its MiCA bill, legislation designed to regulate stablecoins and digital assets. The EU legislation received backlash from crypto firms that said elements of the MiCA bill would “put every digital asset owner at risk”, citing concerns around privacy and safety for users.

As Brexit appears further behind in the rearview mirror, the divergence between EU and UK law will likely widen over time now the UK is no longer obligated to follow EU law. In April, the UK said plans to bring stablecoins under a regulatory framework would allow the UK to become a “crypto hub”. With an election to choose the next prime minister (PM) election underway, time will tell if the new PM’s approach to regulation will differ significantly from the EU’s.

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