The United Kingdom’s treasury department, Her Majesty’s Treasury, has launched a consultation process for stable coins with respect to their application in the national economy, according to an official document published in Jan. 2021.
Saying that the process will be an “agile, risk-led approach”, the consultation calls for evidence to support the safe use of stable coins
While conceding that emerging assets may have potential in reducing costs and increasing efficiency in cross-border transactions, the Treasury also notes that the lack of regulation could result in failures relating to consumer protection
The consultation, which will run until March 2021, will help the authorities form a broader regulatory framework
Taking a staged approach, the focus will initially be on applying stable coins as a means of payment and for services, “either directly or indirectly to consumers”
The consultation comes at a time when countries like China are leading successful CBDC trials -- the Treasury says that the UK is committed to continuing being a "world-leader" in fintech
The UK’s Financial Conduct Authority is also closely examining the market, and generally speaking has shown some openness to the market, having given both Gemini and Aave operational licenses
Meanwhile, the US Treasury has told banks that they can use stable coins for payments
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