Emma RadmoreTulip Siddiq, Economic Secretary, speaking at the Tokenisation Summit, outlined the government’s approach to DLT and its potential to revolutionise traditional markets. She noted that the Digital Securities Sandbox, opened at the end of September, will help the sector to adopt DLT across capital markets and allows firms to innovate by making temporary modifications to legislation and regulatory requirements. The pilot issuance of the Digital Gilt Instrument announced in the Mansion House speech will take place in the sandbox.
Turning to cryptoassets, the Government is committed to allowing traditional finance and cryptoassets to play an integrated role in each other’s future – she gave as an example “atomic settlement” where payment for a security and its transfer of ownership happen simultaneously and which can happen most efficiently if the settlement instrument also runs on the blockchain. At the moment, the only meaningful proposition to do this is stablecoins, but in future this could potentially also be fulfilled by tokenised versions of money.
The Government intends to implement the previously published plans for regulation of cryptoasset activities in full but it will now implement the new regulated activities for stablecoin at the same time, rather than as a first phase. But it does not now intend to bring stablecoin into UK payments regulation as it feels this would cause disproportionate additional regulatory burdens.
Finally, legislation will confirm that cryptoasset staking services will not constitute a collective investment scheme.