What is the UK treasury then doing?

According to BBC it will be a digital currency alongside cash and bank deposits. Right now they are looking at a research and exploration phase before they dip their toe in the water.

They need not look too far. China is right now testing a digital Yuan in Shanghai, Beijing etc.

UK is preparing to hold several consultative engagements as it is really also the reputation of Bank of England that is at stake.

EU has formulated its rules and regulations on the crypto market. These will come into play in 2024 after final approval in EU.

These are the most comprehensive regulations yet and should protect the market, the investor and the user (like you and I).

It is all focused on the use of the stablecoin – the digital currency pegged to an outside source (like the Bank of England, etc).

Are there ‘stablecoins’ out there already? A few. Let us look at some:

The one that springs to mind is USDT or just Thether. It is an asset-backed cryptocurrency stablecoin. It was launched by the company Tether Limited Inc. in 2014. Tether Limited is owned by the Hong Kong-based company iFinex Inc., which also owns the Bitfinex cryptocurrency exchange.

Tether is described as a stablecoin because it was originally designed to be valued at USD $1.00. Tether Limited has stated that it maintains USD $1 of asset reserves for each USDT 1 issued, but has been fined by regulators for failing to do this and has failed to present audits showing sufficient asset reserves. Despite this, their asset base is still $ 66 billion.

Diem was a permissioned blockchain-based stablecoin payment system proposed by the American social media company Meta Platforms. The plan also includes a private currency implemented as a cryptocurrency.

The launch was originally planned to be in 2020, but only rudimentary experimental code has been released until the project was acquired in January 2022.

In general, the project generated backlash from government regulators in the European Union, the USA, other countries, and among the general public over monetary sovereignty, financial stability, privacy, and antitrust concerns which ultimately helped kill the project.

There are others, but it is still not plain sailing even there.