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UK digital bank Starling has barred its customers from sending money to crypto-asset exchanges, after having observed high levels of illegal activity. However, this suspension only applied to the "faster payments" option, which allows low-cost bank transfers at any time. Also, withdrawals aren't affected, and no other UK banks have follwed suit. Starling plans to lift its restriction on June 23 after testing a new financial crime prevention system.

The UK's Financial Conduct Authority (FCA) has once again extended the registration deadline for existing crypto businesses in the country because so many applications are still pending review. The new registration deadline is March 31, 2022. The initial deadline was January 10, 2021, and then July 9, 2021. The extension allows existing crypto firms, who have applied to be registered with the FCA, to continue trading. Also, "an unprecedented number" of firms are withdrawing their applications, because they are not meeting the required standards under the money laundering regulations. https://www.fca.org.uk/news/press-releases/temporary-registration-regime-extended-cryptoasset-businesses

Tom Mutton shares the Bank of England's latest thinking on central bank digital currencies (CBDCs). He looks into what they've learned so far, and how they are setting up their work for the future. He explains some of the principles that are guiding the Bank's work, and how they're approaching some of the big debates on CBDC."

A growing number of crypto asset firms are abandoning attempts to register with the UK Financial Conduct Authority (FCA). Crypto-related firms have since January had to register with the FCA before doing business, but just six have registered, with dozens more still being assessed but not yet deemed "fit and proper". Around 64 have withdrawn their applications.

Sterling withdrawals from Binance's UK platform have been reactivated, with users also able to buy digital coins with debit and credit cards. Earlier in the week, the exchange's customers unable to withdraw or deposit sterling via the Faster Payments network - which enables mobile, internet and other payments between British bank accounts - or bank cards. This was days after the Financial Conduct Authority had cracked down on some of its activities in the UK.

The Bank of England and HM Treasury have today announced the membership of the central bank digital currency (CBDC) Engagement and Technology Forums. The creation of these groups was announced in April 2021, alongside the CBDC Taskforce which coordinates the exploration of a potential UK CBDC. The Engagement Forum consists of senior stakeholders from industry, civil society and academia to gather strategic input on policy considerations and functional requirements pertaining to CBDC. The Forum will have an important role in helping the Bank and HM Treasury understand the practical challenges of designing, implementing and operating a CBDC.

In 2022, the Bank of England and the UK Treasury will launch a consultation which will set out their assessment of the case for a UK central bank digital currency (CBDC), including the merits of further work to develop an operational and technology model for a UK CBDC. It will evaluate the main issues at hand, consider the high level design features, possible benefits and implications for users and businesses, and considerations for further work. The 2022 consultation will inform a decision on whether the authorities are content to move into a 'development' phase which will span several years. If the results of this 'development' phase conclude that the case for CBDC is made, and that it is operationally and technologically robust, then the earliest date for launch of a UK CBDC would be in the second half of the decade.

A U.K. House of Lords committee has concluded that there is "no convincing case" for the Bank of England to issue central bank digital currency (CBDC). It found that "while a CBDC may provide some advantages, it could present significant challenges for financial stability and the protection of privacy." The chair of the committee, said that the potential benefits of a CBDC are "overstated or achievable through less risky alternatives." Nevertheless, the report recommended that U.K. authorities continue to work with international partners on CBDC principles and standards while learning lessons on technical design and usage from the experiences of countries that introduce a CDBC, in case consumer payment preferences, technological developments and the choices of other countries enhance the case for a U.K. CBDC in the future.

The Bank of England dismissed the option of a domestic wholesale CBDC, because the private sector can achieve a similar result themselves. Governor Bailey, at a UK House of Lords Economic Committee meeting, highlighted that banks have existing access to central bank money through its real time gross settlement system. Also, the Bank has introduced an omnibus account that would enable the banks to use digital coins between themselves that settle with the Bank of England. It might also allow nonbanks, like Fnality, to create wholesale digital currency backed by central bank money

The UK Financial Conduct Authority (FCA) has told crypto automatic teller machine (ATM) operators to shut down their machines or face enforcement action. ATMs that offer crypto exchange services must be registered with the FCA, and also must comply with the UK's Money Laundering Regulations. "None of the crypto asset firms registered with us have been approved to offer crypto ATM services, meaning that any of them operating in the UK are doing so illegally and consumers should not be using them."

The Bank of England (BoE)  and HM Treasury (HMT) are inviting researchers to join a newly created central bank digital currency (CBDC) Academic Advisory Group. Through this Group, the BoE and HMT seeks academic input and promote interdisciplinary discussions on a range of topics related to retail CBDC, and of relevance to their digital pound work during the design phase.  The application deadline is September 3, 2023.

The Bank of England (BoE)  and HM Treasury (HMT) are inviting researchers to join a newly created central bank digital currency (CBDC) Academic Advisory Group. Through this Group, the BoE and HMT seeks academic input and promote interdisciplinary discussions on a range of topics related to retail CBDC, and of relevance to their digital pound work during the design phase.  The application deadline is September 3, 2023.

The U.K. government is consulting on Digital Securities Sandbox (DSS) in which the financial industry will be able to set up and test financial market infrastructures that utilize digital asset technology. The DSS will enable firms to set up and operate FMIs using innovative digital asset technology, performing the activities of a central securities depository (specifically notary, settlement and maintenance), and operating a trading venue under a temporarily modified legislative and regulatory framework. The consultation invites feedback from industry on the approach to the DSS, and seeks feedback on some further policy and legal issues.

Payments platform Nuggets is working with the Bank of England to develop a privacy and identity layer for a potential digital pound. The platform, which enables decentralized identity, plans to design a private and secure system to prevent the tracking and correlation of transactions, as well as prevent fraud and money laundering. Nuggets said that it plans to implement zero-knowledge proofs on its privacy layer, which will enable people to verify their identity without sharing their data. https://nuggets.life

The Bank of England (BoE) extended the deadline for comments on its public consultation for a central bank digital currency (CBDC) from June 7 to June 30, 2023, following an omission of a question regarding whether non-U.K. residents should have access to the digital pound, on the same basis as UK residents. https://www.bankofengland.co.uk/paper/2023/the-digital-pound-consultation-paper

At the July 26, 2023 meeting of the Bank of England's (BoE's) CBDC Technology Forum Tom Mutton (Chair) explained that they were now at the start of the design phase of the digital pound roadmap, during which they would conduct experiments and proofs of concept, and develop a detailed blueprint. He noted that the design phase was expected to last for 2-3 years, after which a decision would be made on whether or not to proceed to the build phase, during which the Technology Forum is expected to provide ideas and expert analysis that could inform and challenge the Bank of England's experiments and the eventual digital pound blueprint.

The Bank of England is recruiting for Solution Architects within the Technology team of its Central Bank Digital Currency (CBDC) Unit. The CBDC Unit is responsible for analyzing the opportunities and challenges presented by CBDC and developing the design of a CBDC. The Unit's activities include macroeconomic analysis, work on functional design, exploration of technology options, and engaging private-sector and international counterparts. The responsibility of the job holder will be to explore the technology design and architecture options for a potential retail CBDC.

Nomura is investing in Fnality, the interbank payment and settlement platform that uses "synthetic" wholesale central bank digital currency (CBDC) to settle transactions on distributed ledger technology (DLT) based financial market infrastructures (FMIs). (A "synthetic CBDC" is essentially a stablecoin backed by central bank deposits.) Fnality is expected to launch its first such synthetic CBDC in October 2022, pegged to the British Pound and backed by deposits at the Bank of England.

U.K. lawmakers agreed on new rules for stablecoins, as the government promised to consult on further crypto-asset regulations and a digital pound in coming weeks. The Financial Services and Markets Bill builds upon existing measures to broaden regulations of stablecoins and mentions "Digital Settlement Assets" (DSA) as a new term, moving away from the use of "crypto assets." According to the U.K. government, "crypto assets use some form of distributed ledger technology (DLT)," whereas DSA includes stablecoins, "given their potential to develop into a widespread means of payment."

"Surely it would be possible for Scotland to embrace the next wave of change in the technology of money (digital currency) and generate yet more innovation. The regulatory environment has been changing to encourage competition in Europe, the Scots could build on this. The European Commission's Directive on Electronic Money, the Payment Services Directives have already created the institutions - the Electronic Money Institutions (ELMI) and the Payment Institution (PI) to allow Scotland to drive innovation forward."