The Economic Secretary to the Treasury said at the Tokenization Summit that the UK government is continuing to press on with the integration of traditional finance and crypto assets
Tulip Siddiq, the Economic Secretary to the Treasury talked about distributed ledger technology (DLT) in her keynote address.
She said DLT is part of a wider strategy to ensure the UK retains its place as a leading world financial center.
Furthermore, the Bank of England and the Financial Conduct Authority launched the Digital Securities Sandbox in September as part of their strategy. Tulip shared that “The Digital Securities Sandbox is a fantastic example of what we can achieve when government, regulators, and industry work together”.
Companies will use DLT to execute live transactions in a regulated environment through this program. The goal will be to facilitate the introduction of new platforms for the creation, trade, and settlement of securities on DLTs.
This sandbox is also where the government will pilot a Digital Gilt Issuance called ‘DIGIT’. Through this pilot, the potential of blockchain for debt issuance will also be explored.
Digital Assets Bill was added to the UK Parliament
Tulip added that the Digital Assets Bill has been introduced into the Parliament of the UK. The purpose of this bill is to specify the legalities surrounding digital assets, and the legislative framework necessary to support innovation in areas such as tokenized funds.
Regarding regulation, the government confirmed its intent to establish a comprehensive framework for crypto assets and stablecoins. This includes establishing regulated activities for stablecoins and risk management.
However, stablecoins won’t be rolled out under UK payment regulations for now as “it was critical to get the balance right between regulatory certainty so firms can invest in the UK, but also provide sufficient space for innovation”.
The Economic Secretary confirmed plans to tackle legal uncertainty arising from crypto staking services. She said, “It doesn’t make sense for staking services to have this treatment.” Crypto staking services will no longer be deemed Collective Investment Schemes in the financial law.
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