Set out a pro-innovation strategy for blockchain and stablecoins

Publish a strategy for blockchain & stablecoins. We want this to: 1. Drive a pro-innovation stablecoin & tokenisation regulatory regime e.g. support interest bearing stablecoins & preserve role as wholesale settlement asset 2. Explore Govt uses for blockchain 3. Appoint a blockchain & crypto czar

For centuries London was the centre of global trade and finance. We consider that the future is digital where equities, bonds and real world assets exist as tokens - tradeable 24/7, instantly, globally.

We consider stablecoins to be the basis of a tokenised economy; the US has ruled out CBDCs and is leaning into stablecoins. The UK is at a crossroads and we believe it will fall behind without a strategy. This is a question of national interest to preserve the competitiveness of the City and sterling’s global standing.

The government recognises the transformative potential for digital assets and blockchain technologies to drive economic growth in the UK and increase efficiencies across financial markets. We are committed to making the UK a world leading destination for digital assets.

As part of this the government is bringing forward legislation for a comprehensive financial services regulatory framework for cryptoassets by the end of this year. In April, the government published draft legislation for the core of the future regime, which includes provisions to support the development of UK GBP-backed stablecoin and facilitate effective market access for overseas-issued stablecoin.

The government is actively exploring the use of new blockchain technologies, and published a Wholesale Financial Markets Digital Strategy in July that sets out its approach to digitalising markets. The government has committed to:

1. Enabling the sector to test, scale and roll out solutions that tokenise financial assets and support the digitalisation of post trade processes. 2. Providing a regulatory and legislative framework that allows new digital solutions to be taken forward, and quickly putting in place permanent changes. 3. Ensuring there is a cross-sectoral approach to DLT adoption in wholesale financial markets, where the sector is able to identify the best DLT use cases and build cross-market coalitions to take forward live activity.

The government plans to appoint Digital Markets Champion, who will provide leadership for the sector on wholesale market digitalisation and join up work in the UK sector with other jurisdictions. Further updates will be announced in due course.