UK to introduce stablecoin legislation within months

According to a spokesperson from Circle, the UK is expected to introduce legislation regulating stablecoins within a few months.

Circle, the issuer of USD Coin (USDC), predicts these laws will go into effect soon, as noted in CNBC’s interview with Dante Disparte, Circle’s head of global policy.

Disparte told CNBC that stablecoin legislation in the UK is “in months, not years.”

The third quarter of 2024 has witnessed a surge in stablecoin usage and adoption; stablecoins reached an all-time high market cap of approximately $170 billion in the third quarter of 2024.

Stablecoins have gained popularity because they offer the benefits of cryptocurrency, such as fast, unlimited transactions, while aiming to avoid the volatility associated with digital assets such as Bitcoin (BTC).

Their rise has also attracted the attention of regulators who are concerned about the stability and transparency of these assets.

MiCA and England

While the European Union has already implemented Crypto Asset Markets regulation, which provides a comprehensive legal framework for stablecoins and other digital assets, the United Kingdom has been slower to enact specific legislation.

Earlier this month, the British Parliament heard a proposal to classify digital assets as personal property under British law. Justice Minister Heidi Alexander stated that the bill would protect crypto holders from fraud and simplify ownership disputes.

The former Conservative government led by Rishi Sunak outlined plans to make the UK a global leader in crypto, including regulatory oversight of stablecoins.

However, since the transition to the current Labor 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 harness the potential of technology, such as faster payments and innovation in financial services, while also addressing risks that have arisen in the past.