Circle‘s Dante Disparte expects the United Kingdom to roll out its stablecoin conditions in the coming months. After recent market failures, the UK’s cautious approach to crypto regulation has allowed it to put itself in a good position, according to Disparte. But he said the country must act quickly or risk falling behind other jurisdictions.
The crypto industry needs to catch up to regulation in the UK compared to other regions. Disparte said this pace has allowed the country to inoculate itself from risks such as the FTX collapse in 2022. Although a careful approach, it is now demanding that stablecoins are regulated as their role in the financial system continues to grow.
UK Risks Lagging in Global Stablecoin Regulations
Disparte warned that the UK could lag behind places like the European Union. Since EU has already established strict stablecoin regulations under the Markets in Crypto Assets (MiCA) framework. The UK has also been under pressure, and formal laws have been enacted for stablecoins in Singapore. Unless acted upon in time, the UK risks stifling innovation in areas critical for fintech, instant payments, and digital currencies.
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But he suggested that stablecoin regulation might help with moves that could advance banking and finance, such as the possibility of digitalizing the British pound. Regarding a digital pound, called informally in the media ‘Bitcoin,’ one of the Bank’s current experiments includes a digital pound. This digital currency could boost the UK’s financial infrastructure.
UK Court Classifies Stablecoins as Property
The High Court of England and Wales recently found that stablecoins like Tether’s USDT are property under English law. The ruling was in a case where someone alleged bitcoin worth £2.5 million was stolen and laundered in a blockchain wallet. In clarifying that cryptocurrencies are not physical assets but are nonetheless treated as property for legal purposes, the court set out to determine whether the seized monies should receive that property status.
This choice further confirms that digital assets can be transferred property rights susceptible to tracing transactions in fraud cases. Now, cryptocurrencies like USDT are recognized as a separate type of property under English law. The ruling could set the tone for how cryptocurrency disputes will be handled in the UK in the future.
FCA Intensifies Oversight of Crypto Firms
Apart from the reports, the UK government also introduced a bill in September to define digital assets, including cryptocurrencies, NFTs, and carbon credits, as ‘personal property’ under the country’s laws. The legislative se is part of broader regulatory efforts to ramp up oversight of the crypto sector after a series of high-profile bankruptcies last year.
The Financial Conduct Authority (FCA) has also stepped up its oversight of crypto. UK-based crypto firms are now subject to regulation. Crypto firms must register with the FCA, and marketing material must be approved by an FCA-authorized entity. Failure to comply could bring unlimited fines and imprisonment.
Coinbase, Revolut, and Binance have already updated their platforms to meet the FCA’s new requirements. The regulator has been tough on consumer protection and anti-money laundering regulations. Further regulations of the stablecoins are expected to harden the UK’s regulation of digital assets.
