LONDON—The U.K.’s crypto industry is counting on the nation’s forthcoming stablecoin regulations to clear up “gray areas” for issuers.
The U.K.’s Treasury has announced it would regulate stablecoins under its payments framework as a first step in a multi-stage process to establish a robust crypto regulatory regime, CoinDesk reported.
“This means stablecoin issuers would have to comply with the 2017 payment service regulations, which would require them to register with the Financial Conduct Authority (FCA) and follow rules on providing payment services, as well as meet specific requirements for payment transactions,” CoinDesk said.
Kene Ezeji-Okoye, co-founder of Millicent, a U.K. stablecoin provider, told the news outlet the move could clear up “gray areas” in how companies like Millicent can remain compliant with U.K. law. The company’s model fits under the FCA’s e-money system, but because it also plans to hold custody of users’ cryptographic keys, Millicent could be classified as a crypto asset company as well, CoinDesk explained.
Applause for a Regulator? Yes
E-money systems have to follow the electronic money regulations, while crypto asset providers have to register with the FCA, the U.K.'s financial regulator, and comply with its anti-money laundering (AML) regulations.
Many companies welcome the U.K. government's ambition to be a crypto hub, according to CoinDesk.
“The increased use of stablecoins warrants the need for policymakers and regulators to establish the proper regulatory framework, and we applaud the U.K. for leading on this front,” a spokesperson for stablecoin provider Gemini told CoinDesk.
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