Cryptocurrency: UK Treasury to regulate some stablecoins

The UK government has announced plans to regulate some cryptocurrencies.

Treasury minister John Glen said "stablecoins" would give people confidence in making payments using digital currencies.

Stablecoins are cryptocurrencies designed to have a stable value linked to to traditional currencies, or to a commodity such as gold.

The Treasury plans to consult later this year on creating regulations for a wider set for cryptocurrencies.

Cryptocurrencies, such as Bitcoin or Dogecoin, are virtual or digital currencies.

They can be used to buy products and services, but not many shops accept them yet and some countries have banned it altogether.

The Treasury has not yet confirmed which cryptocurrencies it classifies as so-called "stablecoins".

Bitcoin is believed to be the first ever cryptocurrency to have been created. It first came onto the scene back in 2009 and since lots of other cryptocurrencies have been created and there are now thousands in existence.

The exchange of these digital currencies is done though what is known as "peer-to-peer" transactions - there are no banks, or other third parties involved.

Instead, every transaction ever made is recorded on a huge database known as a blockchain.

Cryptocurrency markets have been described as volatile, however, some companies are beginning to buy into its growing influence.

Elon Musk, the richest person in the world, has voiced his support for virtual currencies and said Bitcoin is a "good thing."

Mr Glen said the UK saw "enormous potential in crypto".

"We have a detailed plan...this is a new world for the newly regulated and the regulators," he told UK Fintech Week.