The UK's Finance Ministry will implement blockchain and DLT technology to streamline operations and procedures in traditional financial markets.
Gwyneth Nurse, director general of financial services at the UK's Finance Ministry, has announced that the agency will begin using the underlying technology of cryptocurrencies to improve infrastructure in financial markets.
The UK's administrative body, which proposed the regulation of cryptocurrencies and stablecoins This year, it plans to use blockchain technology and DLT (Distributed Ledger Technology) to optimize trading and settlement of stocks and bonds.
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Nurse told Reuters that next year, the UK will launch a regulatory sandbox to adopt blockchain and begin experimenting with the technological innovation.
The adoption of blockchain and distributed ledger technology (DLT) reinforces the UK’s plans to become a global technology and investment hub for cryptocurrencies and digital assets.
In April this year, Rishi Sunak, the country’s Chancellor of the Exchequer, anticipated that the nation will adopt new measures to recognise the technological innovation of cryptoassets and make use of their potential to attract the interest of cryptocurrency service providers and investors to the United Kingdom, in order to encourage investment and the creation of new jobs.
Among the country's plans, in relation to the crypto industry, are also to regulate stablecoins as a means of payment and to issue its own non-fungible tokens or NFT.
Cryptocurrencies and Blockchain among UK priorities this year
Incorporating cryptocurrencies and blockchain technology into UK legislation is one of the key priorities that the national government has taken on this year to revolutionize its conventional systems.
According to Nurse, blockchain is being prioritized in traditional financial markets due to its potential to make the current infrastructure of these markets much more innovative and efficient for users.
Blockchain technology, which was born with Bitcoin in 2009, is transforming financial markets by providing transparency, immutability and programmability through so-called smart contracts. These and other qualities that blockchain technology has greatly simplify processes and reduce costs within financial markets, which has encouraged its use and adoption in recent years.
In a move similar to that being made by the UK Treasury, Australia's stock exchange, the Australian Securities Exchange (ASX), has announced that it will use blockchain to clear and settle trades more efficiently.
The Australian Securities Exchange plans to replace its current clearing system with blockchain technology. Canada’s CSE will also use blockchain to streamline its processes and ensure instant settlements.
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