Her Majesty’s Treasury requests and requests input from the crypto community on prospective legislation.
In Thursday’s announcement of an open consultation, the United Kingdom’s Finance Policy Department invited the Crypto community to consider a variety of proposals: “The government invites views from a wide range of stakeholders, and particularly firms engaged in cryptoasset activities.”
Although it officially entered into effect early last year, New Year’s Eve was the end of freedom to work and live between the United Kingdom and the European Union. The query persists in today’s consultation as to how far the nation’s crypto laws can be adopted by those of other nations. The consultation asks stakeholders: “What are your views on the extent to which the UK’s approach should align to those in other jurisdictions?” Further, there is a plan to mandate U.K. Registration with all companies selling stablecoins to citizens in the United Kingdom:
“Due to the digital, decentralised and cross-border nature of stable tokens, the government and UK authorities are considering whether firms actively marketing to UK consumers should be required to have a UK establishment and be authorised in the UK.”
The consultation itself points out the current legislation supplemented by proposed recommendations. The Treasury pays special attention to stablecoins, which it claims are still without a specific legal meaning in the United Kingdom. As a consequence, one of the main suggestions is to allow such a concept.
However, the Treasury would not propose to connect the current concept of stablecoins to the underlying blockchain infrastructure:
“The government and other Cryptoassets Taskforce authorities recognise that whilst cryptoassets are typically underpinned by DLT, stable tokens could be designed using other types of technology. This classification is therefore agnostic on the technology underpinning its use (e.g. whether it relies on DLT or not).”
Elsewhere, the consultation removes algorithmic stablecoins from the concept of stablecoin, obviously reserving the category for tokens attached to the reference commodity, be it fiat or gold.
Beyond trying to create a specific legal definition for stablecoins, the Treasury points out a number of possible places to be controlled, including who is authorised to run stablecoins and how they may have to maintain and monitor reserves.
Responses to today’s consultation are expected by 21 March.
Last year, the Treasury released new guidelines regulating the marketing of crypto, an attempt to combat the explosion of illegal or unknown financial interests that the initial coin offering booms in 2017 and 2018 saw. Failure to report fees from Centra Tech to fund the firm’s ICO was, for example, how DJ Khaled and Floyd Mayweather got into trouble.
Across the pond, the United States has also been tackling the issue of stablecoin authorisation. Last month, Rashida Tlaib proposed a bill that would essentially restrict the issue of stablecoin to licenced banks. Just this week, the Office of the Currency Controller gave national banks the go-ahead to run nodes and make payments on stablecoin networks.
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