With the UK’s exit from the European Union (EU), the government says it is seeking stablecoins, central bank digital currencies (CBDC), and other emerging financial technology innovations.
November 10, 2020 | AtoZ Markets – London’s place as a strategic global financial launch pad is expected to face significant strain following the UK’s withdrawal from the EU. As a result, the British government will look deeply into the design of strategies to maintain its competitiveness in the world financial scenario.
UK to take advantage of the benefits of stablecoins and CBDC
Speaking on November 9, UK Treasury Chancellor Rishi Sunak commented that Brexit offers a new chapter in the history of the country’s financial services industry. According to Sunak, the government plans to take advantage of the potential benefits of novel technologies such as stablecoins and CBDC.
For Sunak, stablecoins and CBDCs could provide a robust architecture for cheaper and more efficient payment processing networks. Therefore, the UK government plans to ensure the creation of adequate regulations to cover these alternatives.
The Bank of England (BoE) will reportedly oversee any future regulation of the stablecoin and the CBDC as part of the main bank’s insistence on controlling Britain’s financial regulations after Brexit.
The Finance Minister’s comments come amid fears of possible economic stagnation following the completion of the Brexit withdrawal and the fallout from the ongoing covid-19 pandemic. In March, the government pledged nearly $ 400 million in aid funds to businesses across the UK.
We’ll publish a consultation to ensure new privately-issued currencies, stablecoins, meet the high standards we expect of other payment methods.— Rishi Sunak (@RishiSunak) November 9, 2020
And the @bankofengland & Treasury are considering if central banks can issue their own digital currencies, as a complement to cash. pic.twitter.com/k5hbVT8R5X
To make up for any reduced economic activity with the EU, Sunak says the country is moving toward establishing greater ties with Switzerland, India, and Japan. According to the Wall Street Journal, the UK Treasury Chief expects a significant reduction in the interaction of financial services with the EU.
Indeed, concerned about any Brexit-induced dislocation, some financial firms moved outside of the UK or set up offices in EU member states to continue offering services on the continent.
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