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HM Treasury’s consultation on a proposed UK regulatory framework for stable tokens

On 7 January 2021, HM Treasury issued a consultation setting out its proposed approach to UK regulation of cryptoassets, including a regulatory framework for "stable tokens”. The consultation sets out only high-level proposals, without draft legislative text, on the basis that detailed rules to implement the proposed regime will be consulted on by the Financial Conduct Authority (FCA) and Prudential Regulatory Authority in due course. The deadline for responding to the consultation is 21 March 2020.

We summarise various key aspects of the consultation in this note, and compare HM Treasury’s proposed approach to other recent initiatives in the UK and EU, including the following proposals referred to in the consultation:

  • HM Treasury’s July 2020 consultation on extending the financial promotions (ie advertising) regime to cryptoassets (FinProm Consultation); and
  • the European Commission's proposed regulation on markets in cryptoassets (MiCA)

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