The U.K. intends to introduce rules on fiat-backed stablecoins in early 2024, according to the government’s latest cryptocurrency policy update published on Monday.
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- HM Treasury, or the finance ministry, said it plans a phased introduction of crypto regulation, starting with fiat-backed stablecoin rules in phase one. The second phase will include regulations on other crypto assets such as algorithmic stablecoins.
- The new rules will place fiat-backed stablecoins under the purview of the Financial Conduct Authority (FCA).
- The FCA will also be tasked with creating rules on custody of fiat-backed stablecoins, based on the existing custody framework.
- The finance ministry said it plans to ensure the FCA can mandate that assets backing fiat-backed stablecoins are held in a statutory trust.
- The Treasury’s latest policy update follows a public consultation period that ended in April. The ministry published a consultation paper in February.
- The U.K. is the world’s third-largest economy in terms of crypto transaction volume, according to on-chain intelligence firm Chainalysis.
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