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 <p class="is-style-lead">In an ambitious move to position the U.K. as a front-runner in the cryptocurrency sector, the government and the Bank of England (BOE) are introducing sweeping regulations for stablecoins and digital currencies.</p>
 <p>The BOE’s strategy primarily focuses on regulating <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>s integral to payment systems by early 2024. This approach is driven by a belief that <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a>s, typically linked to <a rel="noopener noreferrer nofollow" title="stable" href="https://thebittimes.com/tag/stable.html">stable</a> assets like the British pound, pose less risk to the financial system compared to other <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a>currencies.</p>
 <p>Consequently, the BOE’s regulatory framework is designed to maintain the resilience of these digital currencies within significant payment infrastructures.</p>
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    <p lang="en" dir="ltr">JUST IN: Bank of England proposes allowing stablecoins as a payment option for goods and services.</p>— Watcher.Guru (@WatcherGuru) November 6, 2023
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 <p>Moreover, the Financial Conduct Authority (FCA) will oversee the broader <a rel="noopener noreferrer nofollow" title="crypto" href="https://thebittimes.com/tag/crypto.html">crypto</a> market, ensuring a comprehensive regulatory umbrella covering all aspects of digital currency operations.</p>
 <h2 class="wp-block-heading" id="lawmakers-advise-caution">Lawmakers advise caution</h2>
 <p>This dual regulatory mechanism is a thoughtful response to the complexities and varied risks presented by different types of digital currencies.</p>
 <p>The regulations are the latest in a series of moves the U.K. government has been making to streamline the crypto space in the island kingdom. In August, the BOE, in conjunction with HM Treasury, invited interested parties to join an advisory group to explore the feasibility of a digital pound.</p>
 <p>Following the announcement, the BOE received more than 50,000 responses, underscoring widespread public concern regarding privacy, the use of cash, and the pound’s future trajectory.</p>
 <div class="cn-block-related-link">
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  </svg> <span class="cn-block-related-link__prefix"> You might also like: </span> Bank of England releases stablecoin regulation plan
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 <p>However, the BOE’s quest for a digital pound has not been without criticism. According to Bloomberg, U.K. lawmakers are questioning whether the digital pound is needed.</p>
 <p>The influential Treasury Committee chaired by Conservative MP Harriett Baldwin has urged the BOE to “proceed with caution” and consider measures to stem the risks that may come with a digital pound.</p>
 <p>Per the Bloomberg report, the committee asked the central bank to consider whether the digital pound was worth the trouble since it could jeopardize the traditional banking system and cause privacy concerns.</p>
 <h2 class="wp-block-heading" id="strong-uk-diverges-from-us-approach-strong"><strong>UK diverges from US approach</strong>&nbsp;</h2>
 <p>An intriguing aspect of the UK’s regulatory plan is the allowance for <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a> companies to earn returns from the assets backing their <a rel="noopener noreferrer nofollow" title="coins" href="https://thebittimes.com/tag/coins.html">coins</a>. This approach, however, has sparked debates over fairness.</p>
 <p>The concern lies in how rising interest rates might enable companies to profit from these assets, while consumers may not see equivalent benefits. Aware of this potential imbalance, regulators are poised to closely monitor the situation.&nbsp;</p>
 <p>Furthermore, with the implementation of these <a rel="noopener noreferrer nofollow" title="regulation" href="https://thebittimes.com/tag/regulation.html">regulation</a>s, the U.K. is positioning itself alongside other countries including Japan and the European Union. These nations have already set similar regulatory frameworks, indicating a global trend toward standardized digital currency governance.</p>
 <p>This move starkly contrasts with the U.S., which has yet to release a comprehensive framework for stablecoins and the broader crypto market.</p>
 <p>These developments signal a significant shift in the U.K.’s approach to digital currencies under Prime Minister Rishi Sunak’s leadership, in which the nation is attempting to safeguard its financial system and consumers.&nbsp;</p>
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  <svg class="cn-block-related-link__icon icon" aria-hidden="true"><use xlink:href="#"></use>
  </svg> <span class="cn-block-related-link__prefix"> Read more: </span> UK treasury secretary unveils new law to strengthen digital asset industry
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<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/uk-crypto-regulation-in-focus-as-boe-targets-stablecoins-for-2024-tbt72410.html">https://thebittimes.com/uk-crypto-regulation-in-focus-as-boe-targets-stablecoins-for-2024-tbt72410.html</a></p>

UK crypto regulation in focus as BOE targets stablecoins for 2024

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