UK Exchequer poised to unveil stablecoin legislation

Chancellor of the Exchequer Nadhim Zahawi, who replaced Rishi Sunak earlier this year, seeks to fulfill his predecessor’s pledge to promote stablecoins as a means of payment.

The UK Treasury will introduce a financial services and markets bill before parliament on Wednesday, chancellor of the Exchequer Nadhim Zahawi said at The Financial and Professional Service Dinner party on Tuesday.

The bill will include a road map on the adoption of stablecoins the UK Treasury announced in spring, including regulation and promotion. Details are to be revealed later today, but consumer protections, marketing regulations, and decisions regarding amendments to existing electronic money legislation that could allow stablecoins to be recognized and regulated as a state-supported means of payment are all on the cards.

Stablecoin issuers, trading platforms, and custody services providers wishing to operate in the UK will be required to register with the Financial Conduct Authority (FCA), which forced hundreds of crypto companies out of the country earlier this year. “Consumers will remain protected, with legislation ensuring that victims of scams can be compensated while also acting to protect access to cash for the millions of people that rely on it,” Zahawi said on Tuesday night.

Embracing stablecoins is part of the Exchequer’s strategy to counter the adverse effects of Brexit, making Britain’s financial markets more competitive vis-a-vis continental Europe. London, once a throbbing heart of TradFi on the continent, lost its top trading center position to Amsterdam in summer 2021, with trading volumes in steady decline since 2017.

Zahawi, tapped to serve as chancellor after Rishi Sunak resigned from Boris Johnson’s government earlier this month, largely follows in the footsteps of his predecessor, who now leads the Tory leadership race. Zahawi himself dropped out last week.