UK To Introduce New Regulations For Stablecoins In A Matter Of Months, Says Second-Largest Stablecoin Issuer

According to Dante Disparte, the global policy head for stablecoin issuer, Circle. Although there is no exact time, Disparte says that UK stablecoin users should expect the law soon.

A stablecoin is a type of cryptocurrency with its value tied to the value of another asset, like the US dollar, pound, euro, or gold. The most popular stablecoins are pegged to the greenback, including Tether’s USDT and Circle’s USDC, the top two largest stablecoins by market capitalization in the crypto market.

Stablecoins have found common use in the crypto sector and are also favored among traditional platforms that accept digital assets because their prices do not fluctuate. This makes them easily integrated into payments, cross-border transactions, and entertainment platforms like crypto casinos. These online platforms also support digital assets like Bitcoin, offer a wide range of sports and games, and appeal to people worried about privacy since several do not require Know Your Customer (KYC) information (source: https://www.business2community.com/kr/gambling/bitcoin-casinos). As Junsu Kim states, they also allow players to receive jackpot winnings immediately.

Circle Global Policy Head Lauds UK’s Approach Gradual Approach to Crypto Regulation

Speaking in an interview with CNBC in London, Disparte said the UK is “within months, not years” of new laws for the stablecoin market. According to him, the UK’s careful approach to crypto laws is working well in the country’s favor because of serious events that have impacted the sector in the last few years. Disparte highlighted the 2022 collapse of FTX, once one of the world’s largest cryptocurrency exchanges. In November 2022, FTX filed for bankruptcy at the United States Bankruptcy Court for the District of Delaware.

Interestingly, the Circle exec also noted that an official regulatory framework for stablecoins and other digital assets is long overdue. According to him, further delays would cause the UK to lose out on the benefits of stablecoin adoption.

In general, the UK is lagging behind the European Union, which has launched stablecoin regulatory enforcement as part of its Markets in Crypto Assets (MiCA) law. According to a report from multinational professional services giant PricewaterhouseCoopers (PwC), other countries with stablecoin laws include Austria, Bahamas, Greece, Italy, Ireland, Denmark, Germany, and Finland.

The stablecoin market is a large one, worth more than $173 billion according to data from CoinGecko. While USDT is the largest at $120.1 billion, USDC comes in second, at $34.3 billion. The two assets control more than 90% of the global stablecoin market.

The seemingly lackluster approach has been criticized by former Tory member of Parliament (MP) Dr. Lisa Cameron. Also the head of the Crypto Parliamentary Group, Cameron recently criticized political parties, pointing out that all political parties ignored crypto in the election months ago. Dr. Cameron believes that crypto is important, especially among younger people, and states that parties who ignore crypto in the next election “will be doing local constituencies a disservice.”

She has also suggested that to make crypto more popular and understandable, all efforts must deliberately use simple language to describe digital assets and related terms to ensure that everyone is carried along. Cameron also added that the industry should properly explain how people and communities can enjoy the technology without complicating the details.

Broader Crypto Regulation in the UK

While the UK is still working on stablecoin regulation, the country is also focusing on broader cryptocurrency laws. For instance, the Financial Conduct Authority (FCA) believes that there is a need for a strong regulatory framework to guide the country’s crypto industry. According to Val Smith, the head of the agency’s Payments and Digital Assets division, these measures are necessary to fight related crimes, such as terrorism financing and money laundering. However, she noted that some members of the crypto community might consider these measures unduly harsh.

Smith was speaking specifically about crypto service provider registrations in the UK. According to her, making the required standards easier or more flexible will not translate to a better market or a safer public. While she stated that firms looking to enter the sector will get the guidance they need, several factors must be carefully scrutinized. These include the person or people in charge and the company’s mode of operation. Nonetheless, Smith notes that the FCA is interested in working closely with private and public partners to build a reliable, secure, and sustainable crypto industry.