The UK is expected to pass stablecoin regulations soon, with Circle’s global policy head, Dante Disparte, predicting that the laws could be introduced in “months, not years.”
The United Kingdom’s regulatory approach has been slow, especially compared to the European Union, which has already implemented the Markets in Crypto Assets (MiCA) regulation, and Singapore, where stablecoin laws are already in place.
Still, Disparte says this caution might have been a good thing, considering the high-profile collapses that shook the crypto industry in 2022.
UK playing catch-up in crypto regulation
Crypto has seen its share of crises, and stablecoins are now viewed as a key part of future economic infrastructure. Disparte stated that the UK risks falling behind other regions if it doesn’t act fast. “You can’t have the economy of the future unless you have the money of the future,” he said.
Europe’s MiCA sets clear rules for stablecoin issuance and related activities. Without similar rules in place, the UK could miss out on opportunities that EU nations are capitalizing on.
The UK is also behind in developing its own digital currency. Officials at the Bank of England are still in the exploratory phase for a central bank digital currency (CBDC), often referred to as “Britcoin.”
According to Disparte, he recently met with Bank of England officials and left feeling positive about their cautious approach toward launching a CBDC, though no concrete plans have been laid out yet.
Political changes and policy delays
Former Prime Minister Rishi Sunak had ambitious plans to push Britain forward in crypto. Under his leadership, the government had signaled intentions to regulate stablecoins and other crypto-related services like staking, exchanges, and custody, with new laws initially expected by mid-2023.
The plan also included bringing stablecoins under regulatory oversight to ensure better market stability. But political changes have slowed things down. When the Labour Party took over, they weren’t as vocal about crypto regulation.
Current Prime Minister Keir Starmer hasn’t shown the same enthusiasm for crypto, though they did release a plan for financial services that included a proposal to make the UK a hub for securities tokenization.
Securities tokens, for context, represent ownership of real-world financial assets, like shares or bonds, in digital form. It’s a part of the crypto industry that governments and financial institutions are trying to get a grip on.
