Cryptocurrency: UK Treasury to regulate some stablecoins

As part of a plan to make the UK a hub for digital payment companies, the Treasury will regulate some cryptocurrencies.

It said thatstable coins will become recognised forms of payment to give people confidence in using digital currencies.

Stable coins are linked to traditional currencies or assets.

They are less volatile than Cryptocurrencies.

The Treasury said it would consult on regulating a wide range of digital currencies later this year.

We want to see the businesses of tomorrow and the jobs they create here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.

The Treasury has yet to confirm which stable coins will be regulated.

Stable coins are used in the US to facilitate trading, lending or borrowing of other digital assets.

They are not without controversy. The US Commodities Futures Trading Commission fined a Hong Kong based company $41 million for misstating its reserves.

The UK's Treasury said that regulating stable coins would make them safe for the public.

Cryptocurrencies are virtual or digital currency that can be traded or used to buy goods and services, but not many shops accept them yet, and some countries have banned them altogether.

They are exchanged via peer-to-peer transactions, meaning there are no banks involved.

The value of some digital currencies has fluctuated wildly. Major financial companies are now investing in them.

Musk, the richest person in the world, has voiced his support for virtual currencies.

The Royal Mint will be asked by the Treasury to create a non-fungible token.

NFTs are assets in the digital world that can be bought and sold, but have no tangible form of their own.

The digital token can be thought of as a certificate of ownership for virtual or physical assets. NFTs can't be copied or replicated because they have a unique digital signature.

UK Financial Services Minister John Glen said the UK had a detailed plan for the development of a world-best cryptocurrencies.

What does the future look like in the UK? He said in a speech that no one knows for sure.

We think that by making this country a hospitable place we can attract investment and create new jobs.

Regulators are racing to draw up rules to manage cryptocurrencies amid concern that their growing popularity could threaten established financial systems.

The deputy governor of the Bank of England said in December that the proportion of UK wealth held as digital assets was growing quickly.

If the value of cryptocurrencies fell sharply, it could have an effect.

The process of generating digital coins via banks of powerful computers is very energy intensive. Recent research shows that the country of Greece has the same carbon emissions as Bitcoins.

Mr Glen admitted that there were concerns about the environmental impact and said that the government would be looking closely at energy usage associated with certaincryptocurrencies.