UK pushes crypto efforts forward through financial services reforms

The reforms include regulating stablecoins as a means of payment and creating a sandbox where firms and regulators can test new financial technologies.

The United Kingdom’s Chancellor of the Exchequer Jeremy Hunt laid out a number of reforms aiming to “drive growth and competitiveness” to the country’s financial services sector including efforts that support the crypto space.

In an announcement, the U.K. government highlighted that it will create a smarter regulatory framework for the country that it describes as “agile, less costly and more responsive to emerging trends.”

Topics mentioned in the announcement include consulting on proposals for the establishment of a central bank digital currency (CBDC), extending a crypto tax break for investment managers, bringing stablecoins into the regulatory perimeter and creating a sandbox that lets firms and regulators test new technologies that have the potential to transform financial markets.

These are all part of the Financial Services and Markets (FSM) bill announced earlier in October. According to Hunt, the changes will show the U.K.’s status as a competitive global financial services hub. He explained that:

“The Edinburgh Reforms seize on our Brexit freedoms to deliver an agile and home-grown regulatory regime that works in the interest of British people and our businesses.”

In addition, Hunt noted that the government will be further delivering reforms that get in the way of other growing industries like digital technology and life sciences.

Andrew Griffith, the U.K.’s Economic Secretary to the Treasury, said that the reforms will deliver smarter regulation for financial services. The government official believes that this “will unlock growth and opportunity in towns and cities across the U.K.”

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On Nov. 4, the U.K. government also started looking into nonfungible tokens (NFTs) because of the growth of the sector. Members of the U.K.’s Digital, Culture, Media and Sport Committee (DCMS) opened a public inquiry to make an assessment of NFT assets before a review can be performed by the U.K. Treasury.