UK government considers introducing national cryptocurrency | HCLTech

UK government considers introducing national cryptocurrency

UK government considers introducing national cryptocurrency

A public consultation on the attributes of a digital pound will be launched in the coming weeks
 
Jaydeep Saha
Jaydeep Saha
Contributing Writer, HCLTech
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digital pound, a national cryptocurrency, soon

At a time when the central banks around the world are developing or exploring digital currencies, and the European Union (EU) has already set out the world’s first comprehensive rules for regulating crypto markets, the Rishi Sunak government is also considering introducing the “digital pound”, a national cryptocurrency, soon.

With the UK committed to becoming a world crypto hub, Economic Secretary to the Treasury Andrew Griffith told the Treasury Select Committee that a public consultation on the attributes of a digital pound will be launched in the coming weeks.

“I want to see us establish a regime, and this is within the FSMB [Financial Services and Markets Bill], currently being debated in Parliament], for the wholesale use of stablecoins for payment purposes,” he told the BBC.

What are stablecoins?

Stablecoins are designed to have a predictable value linked to traditional currencies or assets such as gold.

The UK government was “a long way down the road... to establish a regime for the wholesale use, for payment purposes, of stablecoins”.

But, with the UK having such a strong fintech and financial sector, “it’s right to seek to embrace potentially disruptive game-changing technologies, and also turbocharge all of those [financial] industries,” Griffith told the committee.

Commenting on this topic in a recent Straight Talk tweetchat, Dinis Guarda, Founder and CEO of Ztudium, a London-based software maker and research service, stated: “Blockchain will be transformative, moving the financial services industry from a model of ‘don’t be evil’ to ‘can’t be evil’. It will be a system with less corruption and more freedom that helps society at a foundational level.”

Consumer protection

While the “crypto winter”—a rapid decline in the value of Bitcoin and other assets—has intensified concerns about whether any cryptocurrency can ever be considered stable, it also has the potential to raise many public-policy issues.

The future of a national cryptocurrency for the UK also depends on the public consultation on Britain’s first general regulatory approach to crypto assets, a sector where consumer protection has come under scrutiny in recent times.

The consultation will be part of a “research and exploration” phase helping the Bank of England and the Sunak government in planning over the next few years.

Regulating crypto

Given the UK’s “strong financial reputation, it will be a long lead-time activity”, said Griffith, mentioning to the committee that “being right was more important than being first”.

Focusing on greater transparency that will benefit everyone, Griffith said the UK rules on decentralized finance could be broader.

“We want the right regime, operate]d in the right way, that has the right balances in it,” he told the committee, adding: “At least six roundtables with those in the crypto industry will take place to expose us as regulators and decision makers.”

HCLTech’s role in the blockchain space

During this transformative period, where blockchain tokenization has given rise to a new set of crypto-financial assets and added a fresh investment and ownership outlook, HCLTech’s OBOL enables tokenization of assets as fungible tokens and NFTs in a complete ‘no-code’ methodology using a graphical interface. It allows an enterprise to fractionalize its physical and digital assets to achieve liquidity and market reach.

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HCLTech has also engaged in a number of other blockchain initiatives, including:

  1. “HCL’s partnership with BiTA, and working alongside other global industry leaders in transportation, logistics and supply chain, will allow us to engage in the development of standards for how blockchain technology will be used in such transportation activities as track and trace, provenance, smart contract management, compliance management, and fraud detection,” said Ajay Bahl, Corporate Vice President, Americas-Mega, HCLTech, after HCLTech announced its partnership with Blockchain in Transportation Alliance (BiTA), an organization dedicated to determining best practices and standards for Blockchain in the transportation industry, in 2018.
  2. In 2020, HCLTech, in collaboration with R3—a leading enterprise blockchain software firm—launched BUILDINGBLOCK, a blockchain platform created to streamline business property insurance for multinational companies. This platform enables insurance companies to craft a master policy document by enabling real time data flow in an easy, cryptographically secure and immutable manner.
  3. HCLTech, an Amazon Web Services premier consulting partner with multiple AWS competencies including DevOps and Migration, has built a highly scalable, cost-effective, and easy-to-integrate blockchain platform called CoTrust™ that is architected to deploy on AWS. Available on AWS Marketplace, it is a managed blockchain application platform which provides scaffolding services on top of various blockchain engines such as AWS Managed Blockchain.

HCLTech’s engineering DNA combined with strong domain expertise allows it to deliver business value using blockchain based solutions. HCLTech Blockchain Labs is a solution-driven practice with expertise across all major enterprise blockchain platforms and work closely with leaders across a broad range of industries, consortia, and technology alliances.

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