Stablecoins Are Evolving To Play A Critical Role In The Future Of Money
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Last week saw the U.K. government announce its intention to explore the potential of crypto assets, blockchain and especially stablecoins in transforming digital finance.
The U.K. is aiming to become a “global cryptoasset technology hub” and to that end it plans to recognize some stablecoins as a valid form of payment. Those stablecoins will be brought under the U.K’s regulatory net and forced to comply with the government’s existing payment rules.
As the name suggests, stablecoins are cryptocurrencies that are designed to have a stable value. That’s quite at odds with traditional digital assets such as Bitcoin and Ethereum, which are known for their extreme volatility. The constantly-changing value of traditional cryptocurrencies means many consider them to be impractical for most kinds of commerce. Stablecoins on the other hand, have their value pegged to that of a traditional fiat currency such as the U.S. dollar or U.K. pound, making them more suitable for mass adoption.
The U.K. Finance Ministry said the plan is to bring stablecoins under its regulatory net in order to pave their way for use as a recognized form of payment. Select stablecoins will be regulated through the payments regulatory perimeter to create conditions for issuers and service providers to operate and invest in the country.
The ministry said that by recognizing the potential of stablecoins and regulating it, it will be able to ensure they can be used by consumers reliably and safely.
“We want to see the businesses of tomorrow – and the jobs they create - here in the U.K., and by regulating effectively we
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