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UK lawmaker says stablecoin is gateway to CBDC, only crypto can ‘disrupt’ payments

Delbert Williams IIBy No Comments3 Mins Read

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The UK remains committed to becoming the hub of the global crypto industry despite recent negative events in the market. and UK Treasury Secretary for Economic Affairs, Andrew Griffiths, underscored that commitment at a meeting of the UK Parliament’s Finance Committee on January 10.

The introduction of a wholesale stablecoin and financial market infrastructure (FMI) sandbox will be the next step in the process. These elements are included in the Financial Services and Markets (FSM) bill, which will also have his second reading in the Senate on Jan. 10.

Stablecoins could serve as the “first use case for what is likely to be a wholesale payment coin” in the “long run time” leading up to the potential introduction of Central Bank Digital Currencies (CBDC). is high, says Griffiths.

Griffiths defended the work being done on stablecoins, stating that they are “here and now” and require immediate attention, and that if CBDC is introduced, it will be a key factor in the growth of the market. He pointed out that it is unclear whether it will replace private stablecoins.

According to Griffiths, if a UK retail CBDC is introduced, it will be an anonymized and brokered platform by design.

RELATED: UK Drives Crypto Efforts Through Financial Services Reform

An advisory document on the CBDC will be released “in weeks, not months,” followed by another document on broader cryptocurrency regulation. The government will also hold at least six roundtables with the crypto sector this year.

This is “not the government’s position” [crypto-based technology] “Like blockchain technology, current technology cannot solve financial sector problems such as settlement times in a ‘disruptive way’,” Griffiths added.

For retail users, Griffiths drew a clear line between crypto as an investment and crypto as a means of payment. Unbacked cryptocurrencies “may or may not find a role in the market,” said Griffiths.

Crypto-based payment methods are a matter of digital and financial inclusion, but “there is a very strong commitment to the continued use and access to cash” and banks remain in place. I’m here.

“Certainly in the current evolution of the market, getting rid of that middleman feels very premature.”

The FSM bill, which could be “completed by Easter,” would also allow the licensing and market introduction of several new payment apps in the FMI sandbox. Griffiths said his fintech use case for crypto-based wholesale could be in “middle office” ledgers and registers for now.

Full regulation of the cryptocurrency market will not be achieved by 2023, Griffiths assured committee members.

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Meanwhile, monitoring crypto promotions plays an important role in consumer protection. Consumers can look for the Financial Conduct Authority (FCA) logo on promotions to know they are dealing with a regulated organization. The Treasury Department’s deputy director for payments and fintech, Laura Mountford, told the commission.

In any event, only about 40% of consumers “understand or believe they are buying cryptocurrencies as gambling,” Mountford said, citing FCA oversight.