John Glen, UK financial services minister, advocates that Britain will initially concentrate on regulating stablecoins instead of the comprehensive crypto market. Talking at a City and Financial Conference, John Glen elucidates that authorities will regulate stablecoins due to its threat if a significant firm dominates the sector. For Glen, the U.K.’s decision to prioritize stablecoins over regulating the more comprehensive financial market is due to concerns of monopolies rising in the market based on the limited number of participants contributing fiat-pegged cryptocurrency payment services.
Notwithstanding calls from financial experts to develop a legal framework for a broader global crypto market, Glen stated that regulating a wider crypto market is not as urging as stablecoins. According to him, it is important to do so as they have, across the years, become the most comprehensive cryptocurrency by trading volume with Tether USD (USDT) leading the way.
The U.K. Finance Minister cautioned in the conference that while no dominating player has been permitted to capture the market, things could transform overnight when a famous firm receives the required regulatory approval to launch one. Facebook’s decision to launch its coin Diem, recognized in 2019 as Libra, has introduced concerns to governments and central banks regarding the opportunity of a significant competitor “developing overnight.” Certainly, the minister’s reasoning reiterates sentiments advocated by various financial regulators upon the Diem stablecoin project.
John Glen Says Britain Wouldn’t Hold Back on Innovative Technologies.
Primarily named Libra, regulatory authorities pointed to Facebook’s global presence as a notable risk factor to sovereign monetary policies associated with the planned digital currency project. Diem, for its part, has endeavored to smoothen these regulatory creases by tendering complete changes to the project. Nevertheless, Diem is yet to obtain the required regulatory approval to start launching its stablecoin.
Glen’s remarks are the most advanced evidence of the U.K. government’s focus on stablecoins as a component of attempts to promote novel fintech changes among the country’s departure from the European Union.
Glen contends that Britain would not hold back innovative technologies and will be protectionist when using distributed ledger technology, which underpins cryptocurrencies like bitcoin. While Britain has earlier acknowledged regulating stablecoins, its financial watchdog refused to publish its e-money rules for the cryptocurrency as they do not possess the same characteristics. The head of consumer distribution policy at the FCA (Financial Conduct Authority), Alex Roy, asserted that stablecoins and e-money couldn’t have the same set of rules because a fiat currency or asset backs the former.