Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will make a comparative assessment of the potential (a) merits and (b) disadvantages to the economy of (i) central bank digital currencies and (ii) stablecoins.

The UK is actively exploring the potential role of central bank digital currencies (CBDCs) to understand the wide-ranging opportunities and challenges they could bring.

On 9 November 2021, the government set out its future timelines for this work, including a joint consultation from HM Treasury and the Bank of England in 2022, setting out an assessment of the case for a UK CBDC.

On April 4 the government published its response to its consultation on the UK’s regulatory approach to stablecoins. It also included a call for evidence on the use of Distributed Ledger Technology (DLT) in financial markets.

The response set out the government’s position that certain stablecoins have the capacity to potentially become a widespread means

of payment including by retail customers, driving consumer choice and efficiencies. By regulating stablecoins appropriately the government will create the conditions for stablecoin issuers and service providers to operate and grow in the UK. For consumers, bringing stablecoins into the regulatory framework means they will be able to use stablecoin services with confidence.

The legislation to bring stablecoins, where used as a means of payment, within the regulatory perimeter is expected to be part of the forthcoming Financial Services and Markets Bill announced in the Queen’s Speech on 10 May. The Bill will be introduced later in the session when parliamentary time allows.