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Updated by Ralph Trayfalgar
In its attempt to become a global center for blockchain and crypto technology, the UK government is looking into accepting some cryptocurrencies as a legal payment method, drawing the interest of the country’s gambling industry.
According to an official announcement, the UK Treasury is drafting legislation to accept and regulate stablecoins in the country. Stablecoins are cryptocurrencies with a value that is pegged to an existing currency, such as in the case of Tether which is pegged to the US dollar.
This characteristic makes stablecoins preferable to regulate, as their value will only have very small fluctuations relative to those used at Bitcoin casinos or other mainstream cryptocurrencies that can have wild peaks and dips all within the same day.
The government does clarify that this move to embrace stablecoins is not a general acceptance for cryptocurrency; rather, the UK seeks to establish itself as a center for the nascent financial technology to thrive.
As Rishi Sunak, Chancellor of the Exchequer of the United Kingdom, said, “This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”
Providing the project is permitted to proceed, it has the potential to benefit UK online casinos as a whole. Transacting with cryptocurrency is substantially less expensive and faster than other casino payment methods, such as bank transfers or debit and credit cards. Digital currencies also make it simpler for firms to operate on a worldwide scale by removing the obstacles that previously existed between countries.
Other types of digital currencies, such as bitcoin, may someday find acceptance in the United Kingdom. The Treasury stated that it will look into the idea later this year, but did not elaborate on what choices would be on the table at the time.
According to reports, the UK’s move to accept stablecoins is only one step in a grander scheme. The administration is reportedly looking into further integrating blockchain technology into the country’s financial sector.
This summer will also see the introduction of a non-fungible token, or NFT, developed by the Treasury and the Royal Mint. Decentralized finance or DeFi loans may also be implemented, which allow owners to lend their digital assets out to others. Such loans may be possible through revisions made to the tax code; if successful, the UK may find itself the home of a very competitive lending market.
Should the United Kingdom follow through and successfully implement its plans, the consequences would be far-reaching and would spread well beyond its boundaries. The United States and other countries would need to adjust their policies in order to avoid falling farther behind.