Launched in 2018 by crypto company Circle, USDC is currently the world’s second-largest stablecoin, with more than $30 billion worth of tokens in circulation.
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LONDON — The UK could introduce stablecoin laws in “months, not years,” cryptocurrency firm Circle’s top policy executive said.
Dante Disparte, Circle’s global head of policy, said he believes the UK will soon introduce legislation on stablecoins, a type of cryptocurrency designed to be stably pegged to government currencies such as the U.S. dollar or British pound.
In an interview with CNBC during a visit to London last week, Disparte said, “I think we will introduce formal laws for the stablecoin market in months, not years.”
The Treasury and Bank of England were not immediately available for comment when contacted by CNBC.
Disparte said that given the events of 2022, such as the collapse of the once $32 billion cryptocurrency exchange FTX and other industry crises, it may be a good thing that the UK takes a longer approach to introducing crypto-specific laws.
“You can also look back and I think a lot of people in the UK and other countries would argue that they were not too quick to step in and fully regulate and bring the environment back to land because of all the problems we saw, and that’s right. Over the past few years years of cryptocurrency development,” Disparte said.
However, he added that recently, there has been an urgent need to introduce formal regulations for stablecoins as well as digital asset trading and other crypto-related activities.
Without specific rules for stablecoins, the UK risks missing out on the benefits of the technology. He added that the UK needs to catch up with the EU, which has begun regulating stablecoins under its MiCa (Market in Crypto-Assets) regulation. Singapore has also agreed to formal laws for the stablecoin industry.
Disparte said: “In the spirit of protecting the UK economy from excessive risks and the impact of cryptocurrencies, ultimately at some point in time the economy will also be protected from job creation and future industries.” He emphasized, “Unless you have future Money, otherwise you can’t have a future economy.”
Benefits cited by Disparte include innovation in wholesale banking, instant payments and the digitization of the pound.
Bank of England officials are currently exploring whether to launch a digital version of the pound, which was previously dubbed “Britcoin” by the media.
Dante said he recently met with officials from the Bank of England and felt reassured by their approach to so-called central bank digital currencies (CBDC).
What has the UK done so far?
British Prime Minister Keir Starmer’s predecessor, Rishi Sunak, had previously envisioned the UK becoming a global cryptocurrency hub.
When the Conservatives were in power, British government officials had said that new legislation targeting stablecoins and cryptocurrency-related services such as staking, trading and custody would be implemented as early as June or July.
In April this year, the former government announced plans to become a “world leader” in cryptocurrencies, outlining plans to bring stablecoins under regulatory purview and consult on a regulatory regime for crypto-asset trading, such as Bitcoin.
In October last year, Sunak’s government responded to the crypto industry regulatory consultation by stating that it aimed to introduce “stage two secondary legislation” in 2024, subject to parliamentary approval.
The new Labor government has not been as outspoken as the Conservatives on cryptocurrency regulation. In January, the party released a financial services plan that included a proposal to make the UK a center for the tokenization of securities.
Security tokens are digital assets that represent ownership of real-world financial assets, such as stocks or bonds.
Stablecoins are a multi-billion dollar industry worth over $170 billion, according to CoinGecko. tethered Tether Token is the most valuable stablecoin, with a market capitalization of over $120 billion. boundary U.S. Department of Agriculture It is the second largest coin, with a total value of coins in circulation exceeding $34 billion.
However, the market has been controversial in the past. In 2022, Tether’s USDT fell from its $1 peg after rival stablecoin terraUSD fell to zero. These events have raised doubts about whether USDT is truly backed 1:1 by Tether’s modest amount of U.S. dollars and other assets.
Tether says its tokens are always backed by the U.S. dollar and dollar-equivalent assets, including government bonds.
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