The UK plans to rely on emerging financial technologies such as stablecoins and CBDCs after Brexit.
The government is keen to maintain its position in the global financial landscape.
Climate change risk management will be managed in conjunction with COVID-19 recovery measures.
With the UK’s exit from the European Union (EU), the government says it is turning to stablecoins, central bank digital currencies (CBDCs) and other emerging financial technology innovations.
As a strategic global financial springboard, the city of London is expected to face significant tensions following the UK’s withdrawal from the EU. Therefore, the country’s government will look to new technologies to design strategies to maintain its competitiveness in the global financial arena.
Harnessing the benefits of stablecoins and CBDCs
In a statement on November 9, UK Treasury Chancellor Rishi Sunak noted that Brexit offered a new chapter in the history of the country’s financial services sector. According to Sunak, the government plans to harness the potential benefits of new technologies such as stablecoins and CBDCs.
For Sunak, stablecoins and CBDCs could provide a robust architecture for cheaper and more efficient payment processing networks. Thus, the UK government plans to ensure that appropriate regulations are created to cover these alternatives.
The Bank of England is reportedly overseeing all future regulations relating to stablecoins and CBDCs amid the umbrella bank’s insistence on overseeing UK financial regulation after Brexit.
The Chancellor of the Exchequer’s comments come amid fears of possible economic stagnation following the finalization of the Brexit withdrawal and the fallout from the ongoing coronavirus pandemic. In March, the government pledged the equivalent of nearly $ 400 million in relief funds to UK businesses.
Rishi Sunak:
The UK will issue, subject to market conditions, its very first sovereign green bond next year.
This will be the first in a series of new issues, as we build a ‚green curve‘ over the next few years to help fund projects to tackle climate change and create green jobs.
Rishi Sunak:
Read more about my ambition for the future of UK financial services here
To compensate for any reduced economic activity with the EU, Sunak says the country is moving towards establishing closer ties with Switzerland, India and Japan. According to the Wall Street Journal, the British Treasury chief expects a significant reduction in the interaction of financial services with the EU.
Indeed, wary of any Brexit-induced dislocation, some financial firms have left the UK or have established offices in EU member states to continue to provide services on the continent.
Promote „green“ finance
In addition to stablecoins and CBDCs, the UK government has also reportedly pledged to put more emphasis on green finance. According to Suna, the country’s financial firms will have to comply with stricter environmental disclosure rules.
As previously reported by BeInCrypto, the New York Department of Financial Services (NYDFS) has also issued a similar warning to crypto companies. At the time, the regulator expressed its intention to require more stringent climate change management risks from state regulated financial institutions.