It must be the first time in Crypto history! Two nations came together in June 2022, for a common purpose. They wished to regulate the virtual currencies industry. In other words, cross-border strategies would come into force. For more details, you can visit a reputable trading website like this Bitcoin trading platform.
The meeting took place on June 29, 2022. The hosts for the regulatory pillar were Her Majesty’s Treasury. The event was called the US-UK Financial Innovation Partnership. There was a fourth participant too. It was the U.S. Treasury Department.
Teaming up would assist in keeping innovations safe. It would also award strength to regulatory outcomes concerning digital assets. Above all, this two-nation bonding would work across jurisdictions.
Cryptocurrency regulations were discussed at the G7 and G20 events too.
However, now individual nations also want to do something. Both UK and the USA promised to support each other in this arena. They wish to create a regulatory framework. It should be clear to all. The framework would cover Stablecoins. After all, they were extremely popular. The focus would also be on cryptocurrency exchanges. Thus, the agendas of future meetings would work around this framework.
Stress On Stablecoins
There have been other meetings too, prior to this one. Participants have included the Financial Conduct Authority (FCA), the Securities and Exchange Commission (SEC), the Bank of England’s staff, and the Commodity Futures Trading Commission (CFTC).
Everyone’s attention has been on Stablecoins. They have also given importance to CBDCs. Future meetings will also focus on the same.
All the panel members attending varied meetings have been keeping a vigilant eye on the progress of digital assets. Governmental agencies across the globe, have been doing the same.
Therefore, the fall of Terra and Celsius has evoked deep concerns. People are worried about the key roles played by Stablecoins. They are equally concerned about trades involving crypto assets. A third concern is about the performance of lending platforms.
Therefore, the UK-U.S. team is keen to discuss broader regulatory initiatives involving crypto assets. They are also eager to get on with the progress of the respective regulatory and policy agendas.
What Are CBDCs?
Both, the USA, and the UK have also offered clarity regarding CBDCs.
However, what exactly are CBDCs?
They refer to Central Bank Digital Currencies. They are just like digital currencies. However, Central Banks across the globe, issue them. Furthermore, the value of each CBDC is pegged to the value of the concerned country’s fiat currency.
Several nations have already developed them. These coins are already in circulation. Other countries are in the process of developing CBDCs. The idea is to transition partially/completely to digital currencies.
Not all individuals have access to financial services, it’s an issue all over. It is evident in the U.S., too. Here, 5% of adults do not own a bank account. Around 13% of adults possess bank accounts. Yet, they prefer to go in for costly alternative services. These services include check-cashing services, payday loans, and money orders.
Advantages Of CBDCs
CBDCs prove useful for people without bank accounts. They could be job-holders or owners of businesses. They may still conduct transactions in privacy and safety. The approaches are accessible and convenient. This way, they gain financial security, too.
There is no need to maintain a complex financial system if CBDCs become popular. These coins reduce the expenses involving transactions. People have the choice of opting for alternative methods of transfer. They also have the choice of affordability.
CBDCs offer other advantages too. For instance, the concerned nation’s central bank may implement diverse monetary policies. This way, the bank may receive assurance of controlled growth. Finally, there is stability.
Usage of CBDCs would lessen the risks associated with cryptos. Digital currencies in their existing forms are not reliable. They are always exposed to volatility. Therefore, they possess no steady values. Fluctuating prices affect households. They also have a negative impact on a nation’s overall economic stability.
Therefore, governments should lend support to CBDCs. Similarly, central banks should control them. This way, businesses may swap cryptocurrencies comfortably.
Interoperability is an issue. It needs to be perfect, for cross-border CBDC payments to succeed.