Alongside the publication of its consultation response, the Treasury has set out a framework to recognise stablecoins as a valid form of payment in the UK.

The Treasury stated that by regulating the cryptocurrency with high regulatory standards, the government will be able to ensure the financial stability of stablecoins which would allow the UK to take advantage of the technology and open its doors for crypto traders and investors.

This is part of the government’s plans to make the UK a global hub for cryptoassets technology and investment.

The Treasury will regulate stablecoins, which are designed to have a stable value linked to traditional currencies or assets like gold and are considered to be less volatile than cryptocurrencies such as Bitcoin. The consultation document claimed that the use of stablecoins in June 2020 outperformed the use of Bitcoin for the first time.