HM Treasury Backtracks on Unhosted Crypto Wallet Data Collection While Tether Plans UK Stablecoin

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UK crypto companies may no longer have to collect personal data from people using unhosted wallets after a proposed amendment by HM Treasury.

In an update to a document entitled Money Laundering, Terrorist Financing and Transfer of Funds, HM Treasury stated that it wanted to downgrade data gathering requirements surrounding individuals sending or receiving crypto with unhosted wallets.

The report stated that there “is no good evidence that unhosted wallets present a disproportionate risk of being used in illicit finance”.

In scaling back the proposals, HM Treasury said that many transactions involving unhosted wallets are completely legitimate, ie when someone wants to use a cold wallet or hardware wallet to keep their crypto safe by moving it off an exchange.

It stated that during its investigations it had not found enough evidence of unhosted wallets posing a risk when it comes to illicit movement of cryptocurrencies to continue with that part of the legislation.

There is one caveat – if a transaction posed “an elevated risk of illicit finance”, crypto firms still have to log the transaction.

The report went on to state “the government is conscious that completely exempting unhosted wallets from the Travel Rule could create an incentive for criminals to use them to evade controls”.

Earlier this month digital minister Chris Philp stressed the government’s desire to make the UK a global crypto hub.

“We do intend the United Kingdom and London to be crypto centres,” he said, while stressing that cryptocurrencies do have the potential for use in criminal activities.

“But of course we’ve got to so that in a way that protects the public and in particular pays attention to issues concerning, for example, money laundering, and making sure crypto is not used as a way to circumvent things like sanctions.”

Tether to launch GBPT stablecoin in UK

In another development for the UK, Tether, the largest US dollar-pegged stablecoin, plans to introduce GBPT, a stablecoin pegged to the British pound.

Due to be issued in July 2022, the stablecoin will become the companies fifth issued by the company, following in the footsteps of USDT (dollar), EURT (euro), CNHT (offshore Chinese Yuan) and MXNT (Mexican peso).

“We believe that the United Kingdom is the next frontier for blockchain innovation,” Tether Chief Technology Officer Paolo Ardoino said.

“Tether is ready and willing to work with UK regulators to make this goal a reality and looks forward to the continued adoption of Tether stablecoins.”