An executive at crypto firm Circle said UK regulators could be rolling out stablecoin legislation in the next few months.
Stablecoins have surged onto the digital assets scene in the past few years, led by Tether’s USDT and Circle’s USDC. However, UK regulators have been slow to release stablecoin-specific rules.
After Dante Disparte, Global Head of Policy at Circle, met with officials at the Bank of England, he was reassured by their digital asset strategies. Disparte told CNBC that UK stablecoin laws could be on the books in a matter of “months, not years.” There has been no comment from the Bank of England or the UK Treasury.
Crypto Resistance
The UK has lagged behind the European Union in creating a regulatory framework for crypto. The EU’s Markets in Crypto Assets (MiCA) regulations are set to take effect by the end of the year. MiCA is an overarching set of rules for crypto and digital assets and includes regulations specific to stablecoins.
The UK has been less enthusiastic about establishing a similar framework for crypto. According to Disparte, much of the UK’s crypto resistance stemmed from concerns in the wake of the collapse of crypto platform FTX, as well as apprehension about fraud and risk.
“You could also look back, and I think many in the UK and in other countries would argue that they’re vindicated in not having jumped in too quickly and fully regulating and bringing the environment onshore because of all the issues we’ve seen in crypto over the last few years,” Disparte said.
The Money of the Future
Because many stablecoins track a fiat currency one to one, they don’t carry as much volatility and risk as other cryptocurrencies. As the use cases for stablecoins have grown, major players in the payments industry have invested in the technology. PayPal rolled out its PayPal USD stablecoin earlier this year, and Stripe just made a billion-dollar investment in stablecoin specialist Bridge.
The proven capabilities of the technology mean the UK could miss out on the benefits of stablecoins if it doesn’t create an infrastructure for them.
“In the spirit of protecting the U.K. economy from excess risk and crypto, there’s also a point in time in which you end up protecting the economy from job creation and the industries of the future,” Disparte said. “You can’t have the economy of the future unless you have the money of the future.”