coinbase (NASDAQ:COIN) said it would introduce tGBP, a pound-based stablecoin backed by fiat. The company announced its new issuance during UK Fintech Week, stating that a stablecoin is essential to position the UK as a true global hub for crypto. Stablecoin is available now.
Works with Coinbase BCP Technologies To export tGBP. Company organized by United Kingdom Financial Conduct Authority.
Coinbase listed its recommendations for growing the UK’s stablecoin ecosystem as follows:
- Ensuring stablecoins can compete on equal terms with other forms of digital currencies: For example, the UK should not impose overly punitive prudential requirements and allow rewards for stablecoin assets.
- Ensuring a proportionate approach to supporting assets: For example, the requirement for systemic stablecoin issuers to hold 40% of reserves as unreserved cash at the central bank is not risk-based.
- Avoiding overly conservative caps for systemic stablecoins: Implementing a “regulatory rate limit,” or cap, on stablecoin issuance is effectively a cap on innovation.
- Allowing the use of stablecoins as exchange assets in the tokenization of wholesale markets: This should also be valid outside the Sandbox in a real-world environment.
Currently, UK authorities are recommending strict restrictions on stablecoin holdings and usage. The offer may be relaxed over time.
Regulated stablecoin issuers are prohibited from paying interest or any returns to holders. This extends to third parties in separating stablecoins from deposits, but inevitably workarounds will emerge.
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