Circle’s Responds to UK HM Treasury Call for Evidence on Payment Services Regulations

In April 2023, Circle responded to His Majesty’s Treasury’s Call for Evidence regarding the UK’s Payment Services Regulations, and wrote in support of bringing payment stablecoins into the UK’s existing payments services and electronic money issuance regulatory regimes. 

As part of the UK’s departure from the European Union, HM Treasury, along with the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) are conducting a review of the UK’s existing financial services regulations. In its response, Circle expressed its appreciation for the UK government’s stated goals to be a hub for financial services innovation, and to create a workable framework for the regulation of digital assets in the UK.

Circle urged HM Treasury to give specific clarity on the issuance of payment stablecoins in the UK, and provide digital asset businesses that are currently or likely to be regulated in the UK with clear and proportionate regulations and licensing requirements. Circle noted that the Payment Services Regulations may need to be tailored to the specific needs of digital asset business, whose use of public distributed ledger technology may differ significantly from a traditional payment service provider. 

Additionally, Circle encouraged HM Treasury to consider the ways in which e-money issuance regulations may need to be amended and tailored to the specificities of payment stablecoin issuers. Broadly speaking, Circle is supportive of a regulatory regime in the UK that hews closely to that of traditional e-money issuance, and Circle urged HM Treasury to provide a pathway for authorized payments institutions to seek authorisation to issue e-money on the basis of their existing payment services licenses in a swifter and simpler way than is the case currently.