The UK is expected to introduce laws regulating stablecoins within a few months, according to a spokesperson from Circle.
Circle, the issuer of the USD Coin (USDC), anticipates these laws will be in place soon, as stated in a CNBC interview with Dante Disparte, Circle’s global head of policy.
Disparte told CNBC that “we’re within months, not years” of stablecoin legislation in the UK.
The third quarter of 2024 witnessed a surge in stablecoin use and adoption, with stablecoins reaching an all-time high market capitalization of nearly $170 billion in Q3 2024.
Stablecoins have gained popularity because they offer the benefits of cryptocurrency, such as fast, borderless transactions, while aiming to avoid the volatility associated with digital assets like Bitcoin (BTC).
Their rise has also drawn attention from regulators, who are concerned about the stability and transparency of these assets.
MiCA and the UK
While the European Union has already implemented the Markets in Crypto-Assets regulation, which provides a comprehensive legal framework for stablecoins and other digital assets, the UK has been slower to introduce specific legislation.
Earlier this month, the British Parliament received a proposal to classify digital assets as personal property under English law. Justice Minister Heidi Alexander stated that the bill would protect crypto owners from fraud and simplify ownership disputes.
The former Conservative government, led by Rishi Sunak, had outlined plans to make the UK a global leader in the crypto space, including regulatory oversight of stablecoins.
However, since the switch to the current Labour government, there has been less emphasis on crypto regulation, although recent developments suggest this may change soon.
Introducing clear rules for these assets could help the UK capitalize on the technology’s potential, such as faster payments and innovation in financial services, while also addressing the risks that have emerged in the past.
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