UK Risks Lagging in Global Stablecoin Regulations, Circle's Dante Disparte Warns

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

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, Disparte said. But he added that the country must act quickly or risk falling behind other jurisdictions.

Compared to other regions, the crypto industry is catching up to regulation in the UK at a slower pace. According to Disparte, this pace has helped the country inoculate itself from risks such as the FTX collapse in 2022. But as stablecoins play an increasingly important role in the financial system, a careful approach now dictates that they be regulated.

UK Risks Lagging in Global Stablecoin Regulations

Disparte warned that the UK could lag behind places like the European Union, which has already established strict stablecoin regulations under the Markets in Crypto Assets (MiCA) framework. The UK has also been pressured by the enactment of formal laws for stablecoins in Singapore. Unless acted upon in time, the UK risks stifling innovation in areas critical for fintech, instant payments, and digital currencies.

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. One of the Bank’s current experiments involves a digital pound, which media reports have informally dubbed ‘Bitcoin’ for the masses. This digital currency could boost the UK’s financial infrastructure.

UK Court Classifies Stablecoins as Property

The High Court of England and Wales recently ruled that stablecoins like Tether’s USDT are classified as property under English law. The ruling came in a case where someone alleged that bitcoin worth £2.5 million was stolen and laundered in a blockchain wallet. In determining whether the seized monies should be granted that property status, the court sought to clarify that cryptocurrencies are not physical assets but are nonetheless treated as property for legal purposes.

This decision further establishes that digital assets are capable of being transferred property rights, which could be used to trace transactions in fraud cases. Cryptocurrencies like USDT are now recognized as a separate type of property under English law, and 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

In related news, the UK government 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 step is part of broader regulatory efforts to ramp up oversight of the crypto sector following 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 result in unlimited fines and imprisonment.

Coinbase, Revolut, and Binance have already updated their platforms to comply with the FCA’s new requirements. The regulator has maintained a strong stance on consumer protection and anti-money laundering regulations. As stablecoins are set to be brought under the regulatory ambit, the UK's regulation of digital assets is expected to harden.

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