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Digital currencies, unlocking innovation in payments

Digital currencies are emerging across the globe, with industry-led initiatives and new projects being explored by governments. Internationally, regulators and policymakers are exploring the use cases for digital currencies, as well as the best regulatory frameworks.

In the United Kingdom, the fintech strategy laid out by the Kalifa Review included many important and positive recommendations, particularly to promote the digitisation of financial services and explore the potential of digital currencies further.

techUK held a roundtable with members and the participation of the Bank of England on 16th May to discuss the progress made on CBDC and some of the use cases.

Exploring Central Bank Digital Currencies

The exploration of the deployment of a Central Bank Digital Currency, which was promoted in the Khalifa Review, is a great stimulus for the UK to remain ahead in the integration of innovation in financial services.

The industry has responded favourably, and the newly created forums and the upcoming consultation will provide a much-needed platform for discussion about the use cases for CBDC and its potential for financial inclusion for example.

Depending on the model and design ultimately chosen, it could have wide-ranging implications for all customers and industries. Therefore, the collaboration between regulators, policymakers and industry will be essential for the UK to deliver a world-leading initiative.

New regulations and opportunities for crypto assets

The government recently announced that it will set out plans to make the UK a ‘global crypto-asset technology hub’, with an upcoming regulation for those new assets and tokens.

It is critical as the UK aims to remain a global leader in innovation and fintech adoption to ensure the regulatory framework enables all to harness the opportunities of innovative technologies in financial services, including supporting the safe adoption of cryptocurrencies.

The industry is developing new products and services at a fast pace with new use cases, in traditional banking but also in embedded finance where consumers can access services from non-traditional financial services. The integration of crypto assets and CBDC could bolster innovation in a competitive and vibrant ecosystem, which could have wider positive effects on the economy and society.

As for CBDCs, working with all stakeholders will be essential to provide the best framework for innovation, inclusion, and increased protection for consumers.

These developments are promising in both the public and private sectors, and techUK is looking forward to working with all stakeholders on the future of digital currencies, CBDCs and crypto-assets.

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Channel website: http://www.techuk.org/

Original article link: https://www.techuk.org/resource/digital-currencies-unlocking-innovation-in-payments.html

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