British Financial Services Minister John Glen has today said the government will focus on regulating stablecoins, rather than the broader cryptocurrency market, in a nod to the threat posed by monopolies (such as Facebook with it’s Diem stablecoin) emerging due to concerns that a major payment competitor to banks could emerge overnight.
“We need to manage risks to competition… There is the potential for some firms to swiftly achieve dominance and crowd out other players, due to their ability to scale and plug into existing online services… We believe the case for intervention in the wider cryptocurrency markets is less immediately pressing.”John Glen, Minister for Financial Services, UK Government
The remarks were made at a City & Financial conference in London, and follow Chancellor Rishi Sunak’s announcement last year that an ‘inflection point’ was being reached post-Brexit, and subsequent statements revealing the government would prioritise the harnessing of novel fintech innovations…Like Central Bank Digital Currencies (CBDC’s) and Stablecoins to ensure the UK could keep pace with developments in the emerging digital economy.
This announcement may of course be a huge poke in the eye for Facebook, who’s Diem stablecoin is experiencing resistance due to the tech-giants huge reach worldwide. The Government seem to be acutely aware that Zuck’s foray into the world of online transactions presents a potential threat to the hegemony of Central Banks, so it could be argued that the move isn’t really in the interests of ordinary crypto-users, but to ensure the continued dominance of privately owned central banks, such as the Bank of England.