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UK government to legally allow stablecoins as a form of payment

UK Government to Accept Stablecoin

The UK government has announced they will soon introduce legislation that will allow stablecoins to be used as a form of payment, making it legal tender.

Stablecoins are a type of digital cryptocurrency which are pegged to existing currencies. For example, both Tether and USD Coin are stablecoins that are linked to the US Dollar.

This fix to existing currencies provides the possibility that stablecoins will be much less volatile than typical cryptocurrencies, such as bitcoin.

The move was announced at the Innovative Finance Summit in London by John Glen, the economic secretary to the Treasury, who hopes the move will help the UK become a global hub for cryptocurrency innovation.

He stated: “We see enormous potential in crypto. I can confirm that we will be legislating to bring certain stablecoins into our payments framework, creating the conditions for sustainable issuers to service providers.”

The government wants to open itself to the possibility of using “distributed ledger technology” (DLT) in the UK, which would allow data to be shared in a decentralised way to obtain more efficiency and transparency in crypto use.

Alongside this, they also plan on establishing a “financial market infrastructure” (FMI) called “Sandbox”, which will allow companies to experiment with different crypto infrastructure services that will allow DLT to be used. This includes research into using DLT for sovereign debt.

A third of shoppers in the UK reportedly want to start paying with cryptocurrencies in 2022

This move to allow stablecoins as legal tender comes after a survey was conducted by Checkout.com which found that one-third of shoppers in the UK want to start using cryptocurrency to pay for things in 2022.

The report surveyed 30,000 consumers and 3,000 merchants, discovering that 30% of consumers intend to use cryptocurrency as a form of payment in 2022. This number jumped to 40% when global consumers were asked.

Around half of UK consumers that were surveyed reportedly stated that they would trust brands that would accept crypto as a form of payment. Meanwhile, around 70% of merchants surveyed stated that they believe introducing cryptocurrency as a way of paying could speed up their payment process, revolutionising their businesses.

Jess Houlgrave, head of strategy for cryptocurrencies at Checkout.com, said the findings showed that shoppers and vendors alike are comfortable with using cryptocurrencies as a form of payment.

She said: “The findings present a clear evolution of attitude toward cryptocurrencies around the world. This is a legitimate transition from the early adoption phase to one that’s more practical, pragmatic and positive overall.

“The cryptocurrency world is maturing and is increasingly being driven by utility, pragmatism, and empowerment. Checkout.com sees the potential for cryptocurrency to not only transform the way people transact but also to potentially reinvent the dynamics of the entire digital economy.”

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