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Government considering ‘digital pound’ despite crises in crypto

digital pound
Image credit: Andy.LIU via Shutterstock

The Treasury is exploring the creation of a “digital pound” based on stablecoin technology, almost a year after the department stated its goal to establish the UK as a “global cryptoasset hub”.

Economic Secretary to the Treasury Andrew Griffith told the Treasury Select Committee that the government was a “long way down the road… to establish a regime for the wholesale use, for payment purposes, of stablecoins”.

The government has been considering implementing stablecoins into the UK economy for some time now, following Prime Minister Rishi Sunak’s – then serving as Chancellor – stated goal of making the UK a major hub for the cryptoasset world.

Despite Sunak’s support of cryptoasset technology, nine months have passed since this ambition was stated. However, the government has now offered a rare development in the plan.

“I want to see us establish a regime, and this is within the FSMB [Financial Services and Markets Bill], for the wholesale use for payment purposes of stablecoins,” Griffith said.

“It is right to look to seek to embrace potentially disruptive technologies, particularly when we have such a strong fintech and financial sector.”

The state of the cryptoasset industry was considerably different when the Treasury first revealed plans to explore digital currency opportunities in the UK. Since then, the sector has been hit with scandals, market crashes, company closures, and layoffs.

The highly publicised collapse of FTX has inflicted sizeable damage to the reputation of crypto, and troubles in the industry have continued to unfold since.

Coinbase, one of the largest cryptoasset exchanges in the world, announced yesterday that a fifth of its workforce would be cut, amounting to around 950 employees gone from the company.