Circle’s Dante Disparte expects the UK to roll out terms for stablecoins in the coming months. Disparte said Britain’s cautious approach to crypto regulation has put it in a good position after recent market failures. But he said the country risked falling behind other jurisdictions if it did not act quickly.
The cryptocurrency industry needs to catch up with regulations in the UK compared to other regions. Disparte said this pace could protect the country from risks such as an FTX collapse in 2022. Although taking a cautious approach, they are calling for stablecoins to be regulated as their role in the financial system continues to grow.
Global stablecoin regulation leaves UK risks behind
Mr Disparte warned that the UK could fall behind countries such as the European Union. As the EU has already established strict stablecoin regulations based on the Market for Crypto Assets (MiCA) framework. The UK has also come under pressure, with Singapore enacting formal stablecoin legislation. Without action in time, the UK risks stifling innovation in key areas for fintech, instant payments and digital currencies.
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But he suggested that stablecoin regulation could help with moves that could move banking and finance forward, such as the potential digitization of the British pound. One of the World Bank’s current experiments involves a digital pound, informally referred to as “Bitcoin” in the media. This digital currency could strengthen the UK’s financial infrastructure.
UK court classifies stablecoins as property
The High Court of England and Wales recently ruled that stablecoins like Tether’s USDT are property under English law. The ruling was in a case where someone allegedly had £2.5 million worth of Bitcoin stolen and laundered in a blockchain wallet. In clarifying that although virtual currency is not a physical asset, it is still treated as property for legal purposes, courts will decide whether seized monies should receive the status of property. I started.
This selection further confirms that digital assets may be subject to transfer of ownership that is susceptible to transaction tracing in fraud cases. Cryptocurrencies like USDT are now recognized as a separate type of property under UK law. The ruling could set the tone for how crypto disputes are handled in the UK in the future.
FCA increases oversight of crypto companies
Separately, the UK government introduced legislation in September that would define digital assets, including cryptocurrencies, NFTs and carbon credits, as “personal property” under UK law. The legislative SE is part of a broader regulatory effort to tighten oversight of the crypto sector following a series of high-profile bankruptcies last year.
The Financial Conduct Authority (FCA) is also increasing its oversight of virtual currencies. Cryptocurrency companies based in the UK are currently subject to regulation. Cryptocurrency companies must register with the FCA and their marketing materials must be approved by an FCA accredited body. Failure to comply may result in unlimited fines and imprisonment.
Coinbase, Revolut, and Binance have already updated their platforms to meet the FCA’s new requirements. The regulator has taken a tough stance on consumer protection and anti-money laundering regulations. Further regulation of stablecoins is expected to result in tighter regulation of digital assets in the UK.
