The government has announced that it plans to bring stablecoins into regulation and that the cryptoassets will be recognised as a form of payment in the UK.

The move is part of government plans to make Britain a “global hub for cryptoasset technology and investment”.

Stablecoins are a type of cryptoasset that are usually pegged to a fiat currency like the dollar and are designed to maintain a stable value.

New measures will include legislating for a ‘financial market infrastructure sandbox’, working with the Royal Mint on a Non-Fungible Token (NFT) in the summer, a Financial Conduct Authority (FCA)-led ‘CryptoSprint’, and setting up an engagement group to work more closely with industry.

“It’s my ambition to make the UK a global hub for cryptoassets technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country,” said chancellor Rishi Sunak. “We want to see the businesses of tomorrow – and the jobs they create - here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.”

The government says that it will also explore ways to enhance the competitiveness of the UK tax system to encourage further development of the cryptoasset market.

The plans were revealed on Monday in a speech by economic secretary to the treasury John Glenn.

At the Innovate Finance Global Summit, he also announced that the UK will “proactively explore” the benefits of Distributed Ledger Technology (DLT) in the UK.

This technology enables data to be synchronised and shared in a decentralised way.

Glenn added that the government is to legislate to establish a financial market infrastructure (FMI) ’Sandbox’ that will enable firms to experiment in providing the infrastructure services that underpin markets, in particular by enabling DLT to be tested.

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