In November the United Kingdom launched a consultation around the implementation of stablecoin regulations, which closes today. New rules will cover stablecoins used for payments, issuance and custody. However, a key aspect of the planned rules announced by HM Treasury has little to do with stablecoins other than technology. Custody of security tokens will no longer be regulated as ‘specified investments’ but instead fall under rules for custody of fiat-backed stablecoin tokens issued in (or from) the UK.
Capital markets participants won’t like this. It adds considerable complexity to compliance. Hence, the Association for Financial Markets in Europe (AFME) has something to say about it.
“The UK’s plan to bring stablecoins into the regulatory perimeter is a positive step towards creating a safe and sound system for cryptoassets, and towards promoting confidence in DLT-based capital markets,” said James Kemp, Managing Director of Technology and Operations at AFME.
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