The UK might become the Crypto hub

Crypto hub

Cryptocurrencies entered the global market in 2009 soon after the recession. Many found this investment model a relief. Over the years, cryptos have also proved their value. Cryptos are prone to price volatility. 

Cryptos are not tied down to any currency model or even time zones. Users can undertake easy peer-to-peer transactions using platform from one country to another. Also, the trading activity on cryptos can be undertaken 24*7. This means the price of a currency tonight will change by the next morning. Price volatility is a major factor driving crypto investments. A simple tweet or a discussion somewhere around the globe can alter the price of cryptos. 

Other than being an investment, cryptos today are being used for other activities. Many online shopping websites today accept crypto payments. Many multinational companies have made their investments in cryptocurrencies. Investors are also moving forward with using cryptos for buying and selling as well. Today, cryptos allow investors to buy even real estate using cryptos. 

What is a crypto hub?

Along with cryptos, there are many other terms used in parallel. One such term that we keep hearing is the crypto hub. Countries that allow for easy trading are crypto hubs. The government in such places has relaxed the rules for crypto investments to rise. Major cities here include El Salvador, Dubai, etc. 

While the US, UAE, and India are in the league, the UK has joined the list recently. The country is all set to make crypto investments easy to manage.

How does the UK plan to achieve this?

The UK government in early April announced that the country is all set to become the next crypto hub. The country is looking at developing a process and governance framework. The crypto investment will vary from stable coins to non-fungible tokens. The country will also work towards developing a financial market infra sandbox. This infra will support improving technology and innovation in the field of cryptos. 

In early Jan 2021, the country released a questionnaire on crypto assets and stable coins. More than 80 participants responded to this survey. The country is now coming forward with the proposals provided by participants. The response has supported the development of a detailed plan on processes. Additionally, the framework will also have a proper governance framework in place. 

What is stablecoin and what does the UK propose?

Stable coins are nothing but a type of cryptocurrency. This type of coin ties down to a currency value, commodity, or another crypto itself. The UK government has come forward with recommendations for governing this investment model. The crypto model will come under the direct supervision of the FCA in the UK. So as an investor how is this legislation impacting you? To undertake any transaction, every investor needs to have an equal amount of pounds. This will allow the crypto to convert itself into traditional currency. The approach will make sure that there is available fiat currency and demand is taken care of. The Bank of England will take care of complete monitoring and governance. There will be regulations put in place to ensure there are enough regulations here. 

The UK government also confirmed that they are looking at regulating taxation rules. This review will also include decentralized finance loans undertaken by investors. This review will also help bring clarity to this process. The country will look at bringing in distributed ledger technology to support loans. DLT will also come in handy to ease current regulations on goods export. 

In the coming months, the FCA is also planning to hold the crypto summit. The platform will work as an industry gathering to understand queries on cryptos. The government is taking steps to ensure everyone has clarity on this investment. There will also be a steering committee set up to advise the government from time to time. This engagement group will allow for easy decision-making for the government.

With the UK government also taking a positive stand, the investments will grow. Cryptocurrencies are here to stay. The day is not far wherein cryptos will replace fiat currencies. It will also come under the direct monitoring of the country’s financial authorities. These measures will allow protecting the interest of its citizens. 

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