UK Finance, the collective voice for the UK banking and finance industry, shared its response to the UK stablecoin consultation that closed yesterday (one of the deadlines was extended). While regulating stablecoins is welcomed, UK Finance members aren’t happy about the custody of security tokens sharing the same rules as stablecoins. AFME also focused on this point in its consultation response. Secondly, UK Finance requested separate rules for stablecoins used for wholesale purposes.
There are two aspects to the consultation, which started on November 6. The Financial Conduct Authority (FCA) will oversee most stablecoins, and a separate Bank of England consultation covers systemic stablecoins. UK Finance responded to both, but we’ve focused on the former. The Bank of England recently extended its response deadline to February 12.
Most regulations attempt to be technology agnostic. Classifying the custody of digital securities with stablecoins rather than conventional securities is at odds with this. “Security tokens have more characteristics in common with traditional assets when compared to stablecoins or any other cryptoassets,” UK Finance notes.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
