Treasury written question – answered on 7th July 2021.

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Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

To ask the Chancellor of the Exchequer, what assessment has made of the potential (a) merits and (b) risks of cryptocurrencies a a means of payment.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The Government launched a consultation on its regulatory approach to cryptoassets and stablecoins on 7 January. This set out the view that new and emerging forms of cryptoassets, known as stablecoins, which seek to stabilise their value, could be used as widespread means of payment and potentially deliver improvements in cross-border transactions. At the same time, depending on scale and nature of use, these developments could pose similar financial stability and consumer risks as traditional regulated payment systems.

The government’s proposed approach would make sure stablecoins meet the same high standards we expect of other payment methods. High volatility has been a notable feature of some cryptoassets, making them less suitable for payments and attractive to some holders as a high-risk speculative investment.

The Government is considering responses and will outline next steps in due course. Any steps taken in light of this consultation will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.

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