Regulators in the United States have been quite active when it comes to efforts regarding regulations surrounding the cryptocurrency industry. Now lawmakers in the nation are looking to prioritize the regulation of stablecoins rather than the entire market, according to its financial services minister.
According to a Reuters report, Financial Services Minister John Glen said the U.K. government would target stablecoin regulation as a bid to mitigate the threat of a private entity dominating this market. The minister’s statement was indirectly referring to Facebook and its Diem stablecoin, formerly known as Libra.
Addressing a City & Financial conference, the minister said “There is the potential for some firms to swiftly achieve dominance and crowd out other players, due to their ability to scale and plug into existing online services.”
The minister went on to state that the regulators would intervene on the broader crypto market in the near future, but as of now, private stablecoins are the immediate issue that needs to be addressed. He added:
“We need to manage risks to competition. There is the potential for some firms to swiftly achieve dominance and crowd out other players due to their ability to scale and plug into existing online services. We believe the case for intervention in the wider cryptocurrency markets is less immediately pressing.”
UK won’t back down on Innovation
The minister continued that Britain won’t be holding back innovation in this area or be conservative when it comes to levering distributed ledger technology, the underlying tech upon which cryptocurrencies like Bitcoin operate.
“We have a once-in-a-generation opportunity here to make vast strides in the efficiency of financial services, and ultimately benefit consumers and the economy as a whole,” he said.
The nation’s financial watchdog had previously said it would not be suitable to implement existing “e-money” laws on stablecoins as many are backed by several currencies and other real-world assets.
“The e-money regime isn’t a perfect match for crypto,” said Alex Roy, head of consumer distribution policy at the Financial Conduct Authority, during the same conference.
The UK has been keeping a close eye on the crypto market. As previously reported by The Daily Chain, the FCA issued a warning regarding the various risks of the cryptocurrency market for young investors that are looking to engage in “high-risk” investments like cryptocurrencies and foreign exchange.