The UK is expected to pass stablecoin legislation in the coming months, an executive from the USD Coin (USDC) Publishers Circle said. The development is a major boost for the UK as it looks to start controlling the use of digital assets as stablecoins become more popular around the world.
In an interview with CNBC, Circle global policy director Dante Disparte explained that the UK could pass stablecoin legislation within months rather than years. Disparte’s comments come as stablecoin adoption is increasing, with the overall market capitalization of stablecoins expected to reach nearly $170 billion by Q3 2024.
Traditional asset-backed tokens, i.e. cryptocurrencies pegged to real-world assets such as the US dollar, enable quick transfers across borders and do not pose the risks associated with Bitcoin and other volatile cryptocurrencies. Therefore, it is gaining popularity. As this growth unfolds, regulators around the world are beginning to pay more attention to the stability, transparency, and risks inherent in stablecoin tentacles.
As such, while the European Union adopted broad regulations for digital assets through the Market for Cryptoassets (MiCA) earlier this year, the UK has been slow to enact standalone legislation. MiCA also supports stablecoins and other cryptocurrencies. It provides a fundamental legal framework, consumer protection and norms for the reliability of a new form of clear market financial system across Europe.
UK shifts regulatory focus under New Labor government
Meanwhile, the UK has only recently started taking steps to regulate space. This week, an amendment was introduced in the UK Parliament that would bring digital assets into the category of personal property under UK law. Minister of Justice Heidi Alexander pointed out that the introduced bill recognizes cryptocurrencies as valuable assets and allows fraud cases and ownership disputes to be regulated.
In the current scenario, the regulatory structure in the UK has changed since the change from the Conservative government under Rishi Sunak to the current Labor government. During Sunak’s tenure, there was a clear desire for the UK to become a leader in crypto adoption, and stablecoin regulation was part of that. However, the situation changed after the election of a new government, with little emphasis placed on regulating the use of cryptocurrencies.
Recent trends in stablecoin regulation show that this state of affairs is changing due to pressure from the financial sector and international regulations such as MiCA, which states that it is time to define stablecoins. . Supporters argue that comprehensive legislation could enable the UK to take advantage of speed, efficiency and financial innovation, while countering threats such as fraud, customer protection and market stability. are.
Before the UK develops stablecoin legislation, it is important to understand how this framework complements other European and global jurisdictions. For the UK, the timing and content of these regulations could determine the country’s position in the emerging cryptocurrency space.
