UK Regulatory Framework Will Embrace Coexistence of Stablecoins and CBDCs, Aligned with EU Standards

cryptonews.com:

To align with EU standards, the United Kingdom has unveiled plans on March 6 to integrate both stablecoins and central bank digital currencies (CBDCs) into its regulatory structure.

Former Bank of England (BoE) official Varun Paul detailed the UK’s effort to catch up with the rest of the European Union in crypto regulation in a report by a crypto outlet.

Talks regarding stablecoins and CBDCs have always been debated between crypto natives and traditional finance.

The UK treasury released a proposal in 2023 to regulate the crypto industry, requiring Virtual Asset Providers (VASPs) to obtain authorization from the Financial Conduct Authority (FCA).

Despite concerns about CBDCs contradicting decentralization, Paul believes the UK’s regulatory structure would benefit from this integration. He suggests a system where central banks issue a CBDC backed by bank notes, enhancing trust in digital assets.

UK regulations embracing coexistence of stablecoins & CBDCs is a bold move forward. But sike, too late – we've already got the ticker $CBDC For the people,By the people, putting power in the hands of the people. @Cointelegraph @bankofengland #CBDC #Stablecoins…

— Central Bank Digital Currency (@SolanaCBDC) March 6, 2024

Paul, now a senior director for CBDCs and financial market infrastructure at Fireblocks, said that the U.K. would benefit from the nature of its financial regulatory structure.

He highlighted that Joint regulatory frameworks that facilitate the FCA, Treasury, and BoE to collaborate without friction have always been key to seamless financial innovation and regulation in the UK.

As Paul revealed, the regulatory bodies would be saddled with different duties. The FCA would oversee stablecoins, while the BoE focuses on