In the UK, stablecoins now have a new name and a new law to regulate them

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In the UK, stablecoins now have a new name and a new law to regulate them

The new bill is another wave of recognition for Bitcoin, the crypto industry and digital assets in the UK. On October 25, the United Kingdom moved forward with the Financial Services and Markets Act, cementing its vision for Bitcoin and digital assets in the country.

For the cryptocurrency industry and companies in that sector, this proposal is a kind of recognition that they welcome with open arms. The proposed legislation proposes “a range of measures to maintain and enhance the UK's position as a global leader in financial services, ensuring the sector continues to serve individuals and businesses across the country”.

UK as a Global Cryptocurrency Hub?

Lisa Cameron, a Member of Parliament said: “I have spoken to companies who are involved in CBDCs and stablecoins. We’ve looked at crypto tokens, and Bitcoin is obviously part of the sector”.

“We are on a learning curve and it’s just very, very important because the U.K. government has a policy vision that the U.K. will become an international hub of cryptocurrency and digital assets”. “In my understanding and from the session we’ve had at the Bitcoin conference, you know, some of that relates to Bitcoin, some perhaps not all so greatly because of the decentralized nature of it”.

The bill builds on the existing measures to expand the regulation of stablecoins and touches on the name "Digital Settlement Assets" (DSA = Digital Settlement Assets) as a new term, moving away from the use of the term "crypto-assets"

Better regulation of digital assets

According to the UK government, “crypto-assets use some form of distributed ledger technology (DLT)”, while DSA includes stablecoins, “given their potential to develop into a widespread means of payment”.

The UK government has previously commented that there will be a “package of measures” aimed at improving regulation and clarity around blockchain, cryptocurrency, and bitcoin. On the other hand, the new British Prime Minister, Rishi Sunak, has also expressed interest in certain areas related to cryptocurrencies, such as supporting the creation of an irreplaceable token of the British Royal Mint, and has been vocal in his support for the central bank digital currencies.

The recognition of crypto and digital assets as financial instruments has yet to be written into law. The bill must pass key steps: The House of Lords must first approve or amend the bill before final royal assent from the new monarch, King Charles III.