The UK is on a path to becoming the hub for digital payment companies. Treasury announced plans to recognize Stablecoins as a form of payment.

Stablecoins are cryptocurrencies pegged to fiat currencies. Their value remains stable in accordance with traditional currencies. For instance, USDT is pegged to the US dollar thus its value remains stable.

UK Treasury said that the plan to recognize stablecoins is a means to give people confidence in using digital currencies as a form of payment. However, the government is yet to confirm which stablecoins will be recognized in this regard.

The adoption of crypto is occurring on a wider scale. Banning crypto is no longer an option. Therefore, countries are moving towards regulating cryptocurrency. Just last week, the Indian Parliament passed a law imposing a 30% tax on crypto earnings.

UK government also plans to regulate digital assets later this year. The chancellor of Treasury Rishi Sunak said “We want to see the [cryptocurrency] businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.”

Stablecoins are already in use in different parts of the world. In the United States, people use stablecoins to lend, borrow, and trade cryptocurrencies.

The decentralized nature of crypto assets makes them hard to regulate. Hence the Treasury will need to come up with an elaborate plan on how to plug digital currencies as a secure method of payment.

The UK may also get into the NFT space. The country’s Financial Services minister said the UK sees an “enormous potential in crypto” and has a “detailed plan [for] harnessing the potential of blockchain and supporting the development of a world-best crypto ecosystem”. Additionally, he said, “we think that by making this country a hospitable place for crypto we can attract investment [and] generate swathes of new jobs.”

Currently, 0.1% of the UK’s wealth is in the form of digital assets. However, that number is growing at a rapid pace.