The government has unveiled new plans that will see cryptocurrency recognised as a valid form of payment.

According to the Treasury, the move is part of wider plans to make the UK a “global hub” for cryptoasset technology and investment.

The cryptoasset that the government intends to implement, stablecoins, are typically pegged to a fiat currency such as the dollar and are intended to maintain a stable value. The Treasury suggested that with “appropriate regulation”, stablecoins could provide a more efficient means of payment and widen consumer choice.

The government is planning to legislate to bring stablecoins – where used as a means of payment – within the payments regulatory perimeter, creating conditions for stablecoins issuers and service providers to operate and invest in the UK.

By recognising and regulating the technology now, the government said this can ensure “financial stability and high regulatory standards”.

As part of a new package of measures, the plans include introducing a “financial market infrastructure sandbox” and establish a Cryptoasset Engagement Group to work more closely with the industry.

The Treasury also stated that it will explore ways of “enhancing the competitiveness of the UK tax system”, to encourage further development of the cryptoasset market, as well as work with the Royal Mint on a Non-Fungible Token (NFT) this summer.

Chancellor, Rishi Sunak, said: “It’s my ambition to make the UK a global hub for cryptoasset technology, and the measures we’ve outlined today will help to ensure firms can invest, innovate and scale up in this country.

“We want to see the businesses of tomorrow – and the jobs they create - here in the UK, and by regulating effectively we can give them the confidence they need to think and invest long-term.

“This is part of our plan to ensure the UK financial services industry is always at the forefront of technology and innovation.”

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