UK’s New Chancellor Of The Exchequer Proposes Bill For Regulation Of Crypto And Stablecoins
- The new Chancellor of the Exchequer in the U.K. has introduced a novel bill for crypto and stablecoin regulation
- To be put into action, the bill needs to be passed by the House of Lords and the House of Parliament
The new Chancellor of the Exchequer in the U.K., Nadhim Zahawi, has laid out plans to regulate crypto and stablecoins in a new Financial Services and Markets bill presented to the British Parliament on July 20, 2022.
The bill grants the power to the Bank of England to limit the reach of the Financial Conduct Authority (FCA) when it comes to regulating payments systems using crypto assets or virtual assets services providers in situations where said actions might contribute to financial instability and have adverse impacts on businesses in the U.K.
Zahawi took over after former Chancellor Rishi Sunak, who was optimistic on usage of crypto and other digital assets, along with former City minister John Glen, resigned due to repeated clashes with former Prime Minister Boris Johnson on the topics of tax and spending.
Additionally, Zahawi’s first task while stepping in the shoes of Sunak would be to reduce the taxes being paid by Britons followed by a discussion on the cost-of-living crisis.
While Sunak and Glen have lobbied to turn the country into a crypto hub, pushing the Royal Mint to create a non-fungible token (NFT) collection in their efforts, Zahawi’s bill is focused on regulation of digital settlement asset service providers (DSA).
“We see enormous potential in crypto. We aren’t going to lower our standards, but we are going to sustain our technological neutral approach,”Glen said in April.
Intriguingly, one of the more peculiar provisions of Zahawi’s bill stipulates that the Bank of England (BoE) retains the right to demand rules for the activity of the DSA, rules for any entities doing business with the DSA, notifications of any changes to rules, and that the DSA not change rules without approval from the BoE.
In consultation with the Financial Conduct Authority (FCA), the BoE needs to issue a policy statement related to its oversight of payment systems using digital assets and DSAs.
Moreover, the meeting logs from the Treasury revealed on July 14 confirmed that it had met with major firms like Binance, Paxos, Coinbase, Goldman Sachs, a16z, Kingsway Capital, and Circle in early 2022 to discuss the future of crypto in the nation.