According to the Reuters report, Financial Services Minister John Glen said the U.K. government would target stablecoins in order to prevent threats to competition in a bid to prevent any single private player from coming to dominate the market. In particular, it is thought the finance services minister was referring to Facebook and its Diem stablecoin, formerly known as Libra. The announcement of Facebook’s stablecoin caused consternation in the U.K. and everywhere in the world.
“We need to manage risks to competition.”
Addressing a City & Financial conference, the minister said that while there was a case for intervention in the broader digital currency markets, private stablecoins were a more immediate target. The finance service minister said, “We need to manage risks to competition. There is the potential for some firms to swiftly achieve dominance and crowd out other players due to their ability to scale and plug into existing online services. We believe the case for intervention in the wider cryptocurrency markets is less immediately pressing.” Earlier, several central banks had said that Diem stablecoin could threaten their country’s financial sovereignty.
U.K. government to continue to support new technologies.
On blockchain technology, the finance service minister said that the government would take steps to encourage innovation and collaboration on new technologies in a bid to strengthen this emerging sector of the economy. “We have a once-in-a-generation opportunity here to make vast strides in the efficiency of financial services and ultimately benefit consumers and the economy as a whole,” according to the official,” Glen added. Stablecoins have grown to become the largest component of global cryptocurrency trading volumes. Stablecoins allow for the utility of on-chain payments and settlement without the exchange risk of public digital currencies. With private interests such as Facebook mobilizing to launch their own stablecoins, governments in the U.K. and worldwide are focusing on regulating this emerging market.