Government plans to back cryptoassets

“As someone with a keen interest in the subject I was very interested to read the Government’s announcements concerning blockchain and cryptocurrencies this week.”, says Chris Davies, partner in our Newbury office

“In particular that stablecoins will be brought within regulation with a view to being widely accepted as a recognised payment mechanism in the future. The government intends to legislate to bring stablecoins, where used as a means of payment, within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.”

“Whilst any form of crypto regulation will be frowned upon by crypto purists, I believe that limited regulation is inevitable and will help to bring crypto to a wider audience.”

“My only concern would be that it does not prevent those without a bank account from being excluded from being able to access crypto in the first place. One of the major attractions to crypto is that it opens up the market to the many millions who are currently ‘unbanked’.”

“In a positive statement, the Economic secretary to the Treasury, John Glen announced that the UK will proactively explore the potentially transformative benefits of Distributed Ledger Technology (DLT) in UK financial markets, which enables data to be synchronized and shared in a decentralised way to potentially achieve greater efficiency, transparency and resilience.”

“As someone that provides taxation advice, I was also very interested to learn that the Government will be exploring ways of enhancing competitiveness of the UK tax system to encourage further development of the cryptoasset market. Certainly clarity around some of the rules that apply to crypto related transactions would be most welcome.”

“Meanwhile the Chancellor of the Exchequer has commissioned the Royal Mint to create a Non-fungible Token this Summer, a clear signal that the Government are firmly behind this aspect of blockchain.”

If you have any questions about the taxation of cryptoassets, or setting up or running a business in the crypto sphere please contact Chris or one of his colleagues at any UHY Ross Brooke office.