Is the UK hoarding stablecoins? Do they know all about Tether’s lawsuits and baseless allegations?
Today the HM Treasury has put out a statement that says, “new technologies such as stablecoins – privately-issued digital currencies – could transform the way people store and exchange their money, making payments cheaper and faster.”
Private stablecoins like Tether, Circle, Coinbase, and Gemini dollar are some tricky businesses. Tether once claimed that its cryptocurrency, which maintains that a one-to-one peg with the US dollar, has been 100% backed by US dollar reserves. After some probing, it then concedes that it was only 74% backed.
Those are detailed in an ongoing investigation by the New York Attorney General, which has alleged that Tether’s sister company Bitfinex used the stablecoin company as a way to cover a large amount of debt.
Rishi Sunak, the Chancellor of the Exchequer, has tweeted that the Treasury will “publish a consultation to ensure new privately-issued currencies, stablecoins, meet the high standards we expect of other payment methods.”
Sunak continued that this may “harness the potential benefits of stablecoins, whilst managing risks to consumers and financial stability.”
They also noted that the Treasury and the Bank of England still consider “whether and how central banks can issue their own digital currencies as a complement to cash.” These can compete with private stablecoins or help individuals transition to cashless societies.
Last October, Andrew Bailey, the Bank of England’s governor, told an audience at the Brookings Institute, “Stablecoins could offer some useful benefits.” Bailey stated that stablecoins “could further reduce resistances in payments, by increasing the speed and then lowering the cost of payments (particularly if global stablecoins were to be established).”