The Treasury has announced that it will regulate some cryptocurrencies as part of a wider plan to make the UK a hub for digital payment companies.

So-called “stablecoins” will become recognised forms of payment to give people confidence in using digital currencies, it said.

Stablecoins are designed to have a stable value linked to traditional currencies or assets like gold.

They are considered less volatile than cryptocurrencies such as Bitcoin.

The Treasury also said it planned to consult on regulating a much wider range of digital currencies later this year, without saying which they might be.

Chancellor Rishi Sunak said: “We want to see the [cryptocurrency] 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.”

The Treasury has not yet confirmed which stablecoins will be regulated, however well-known ones include Tether and Binance USD.

Stablecoins are currently used in the United States to facilitate trading, lending, or borrowing of other digital assets.

However, they are not without controversy. Tether, a Hong Kong based company, has faced questions over its business practices and was fined $41m in 2021 by the US Commodities Futures Trading Commission for allegedly misst