The UK and the US will collaborate to regulate cryptocurrencies

Her Majesty’s Treasury hosted the regulatory pillar of the US-UK Financial Innovation Partnership with its counterpart, the US Treasury Department, on Jun 29th. Both parties recognized the importance of collaborating to ensure safe innovation, and improve regulatory outcomes across jurisdictions for digital assets.

Stablecoins

The joint statement stated that top domestic watchdogs like the SEC, CFTC, Bank of England staff, and the Financial Conduct Authority (FCA) all attended such a meeting. It mainly focused on the development of stablecoins, CBDCs, and other recent developments. The document stated that the panel had laid the groundwork for future dialogues.

Since its birth, cryptocurrency has been made in response to third-parties-imposed restrictions on borderless transactions. Regulators feel it is imperative to create cross-border efforts to target the crypto industry, as crypto assets have been making headlines due to a string of fiascos in the midst of a historic market crash.

Among all the regulatory concerns regarding the space, the ongoing “key role of stablecoins and crypto-asset trading and lending platforms” in the digital asset ecosystems – as embodied by the recent drama occurring in the fall of Terra and Celsius – has caused concerns from watchdogs worldwide. This is the statement:

“UK and US participants also considered future opportunities for further discussion on broader crypto-asset regulatory initiatives and considerations as their respective policy and regulatory agendas progress.”

Crypto regulations have also been a widely covered issue within G7 & G20 meetings, as indicated by the statement. Both parties vowed that “robust cross-border regulatory cooperation” that aims to provide a clear regulatory framework for stablecoins and crypto exchanges will be the theme behind such meetings in the future.

CBDCs

Additionally, the UK authorities and US authorities exchanged views about their approaches to CBDCs. They also discussed their plans for research and technology exploration. The Bank of International Settlements (BIS), which conducted a survey, found that nine of ten central bankers are currently exploring the possibility of creating their own CBDCs.

The rising trend of adopting CBDCs within the fiat-based monetary system is perceived by many central banks as an evolution of their respective roles rather than a revolution, according to Cecilia Skingsley, First Deputy Governor of Sweden’s central bank.

She said that interoperability, as digital currencies are developed and implemented by different governments around the world, is a major challenge for cross-border CBDC payment. To ensure the success of these currencies, it is crucial that there are cooperative communications between all countries.

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