At a hearing of the Treasury Committee of the U.K. Parliament, MP Andrew Griffith and his associates discussed payment systems and the usage of CBDC (Central Bank Digital Currency).

Despite recent negative trends in the cryptocurrency market, the United Kingdom is still dedicated to becoming a leader in the crypto industry. Andrew Griffith, Member of Parliament and HM Treasury

Economic Secretary, expressed his commitment to the sector during a meeting of the UK Parliament Treasury Committee on January 10th.

On January 10th, the Financial Services and Markets (FSM) bill will have its second reading in the House of Lords. This legislation includes the introduction of a wholesale stablecoin and the Financial Markets Infrastructure (FMI) sandbox, which will be the next steps in the process.

Griffith believes that a stablecoin, specifically, would be the pioneer in the lengthy process leading up to the potential debut of a CBDC, most likely serving as a means of wholesale settlement.

If a retail British CBDC were to be launched, Griffith suggested that it would be intended to be an anonymous and intermediary platform.

A consultative paper on CBDC is expected to be released in the near future, with another paper to follow shortly afterwards which will focus on regulatory issues concerning cryptocurrency. The government has also announced that they will hold at least six rounds of meetings with the crypto industry during this year.

Griffith made it clear that the government does not view the implementation of crypto-based technology as certain, but he noted that current methods are unable to reduce settlement time in a meaningful and revolutionary way as blockchain technology can.

Griffith outlined a clear distinction between the use of cryptocurrency as an investment and its utilization for payment purposes. He stated that unbacked cryptocurrency may or may not end up having a role in the market, but emphasized his commitment to access and usage of cash, in which banks continue to have a major influence. Furthermore, the removal of intermediaries at the current state of the market would be too “premature” according to Griffith.

The FSM bill is expected to be completed by Easter and will additionally allow the certification of some newly created payment apps inside the FMI sandbox, with their further utilization in the market. Griffith informed the committee that the employment of crypto-based fintech in ledgers and registers within the middle office will be possible for the present time. Full regulation of crypto asset markets may not be implemented until 2023, making sure to follow the policy of exact same regulations for similar assets.

In the meantime, keeping an eye on crypto promotions is critical for shielding customers. Buyers can look for the Financial Conduct Authority (FCA) emblem on advertisements to make certain that they are engaging with a controlled firm, Laura Mountford, Treasury deputy director of payments and fintech, informed the committee. Mountford likewise remarked that, as per FCA observing, just 40% of buyers comprehend or accept that they are taking a risk when they buy crypto assets.



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