The UK will begin discussions on stablecoins in 2025 through a nearly 250-page consultation report.
This move comes late while Japan, Singapore, Abu Dhabi, and even the USA have completed legal frameworks for stablecoins from 2022 to 2024, driving the development of the global cryptocurrency market.
MAIN CONTENT
The UK is lagging behind in establishing regulations on stablecoins compared to other countries.
The lack of action has caused the UK to lose its advantage in the race to become a global cryptocurrency financial center.
Stablecoins play an important role in the Blockchain ecosystem and positively impact global financial innovation.
Why is the UK considered slow in developing policies on stablecoins?
Financial experts and UK government leaders acknowledge that the country has great opportunities post-Brexit but lacks determination to act. The UK government remains at the research and proposal stage, while countries like Japan and Singapore have enacted specific laws from 2022 to 2024.
This delay has caused the UK to lose its position as a global financial center for cryptocurrency, despite having great potential in the City of London.
Stablecoin will be "one of the most significant phenomena of today's world" and will certainly become the main currency on Blockchain.
– Scott Bessent, financial market expert, 2023.
(Scott Bessent, investor and financial strategist, 2023)
What is the impact of the slow enactment of stablecoin laws on the UK?
The inability to finalize the legal framework has prevented the UK from attracting quality investment and human resources in the cryptocurrency field. Meanwhile, economies like the USA with the GENIUS Act initiative have placed stablecoins at the center of financial infrastructure, attracting billions of USD in venture capital.
As a result, many companies and investors are shifting towards markets with more prioritized and clearer policies.
Comparing the time taken to complete Stablecoin laws between countries
Country Year of Stablecoin Law Enactment Notable Features Japan 2022 Clear law, supports safe development Singapore 2023 Policy encourages innovation, attracts capital Abu Dhabi 2024 Business-friendly cryptocurrency environment USA 2024 (GENIUS Act) Stability, integrating Stablecoin into financial infrastructure UK 2025 (consultation report) No law yet, just starting research
What role do stablecoins play in the global Blockchain ecosystem?
Stablecoin is a crucial bridge between fiat currency and the Blockchain ecosystem, facilitating stable transactions, minimizing price volatility, and promoting DeFi, NFT, and other DApps.
For example, Circle's USDC currently has a market capitalization of over $50 billion, widely used as a foundational currency to help users access Blockchain financial products safely and transparently.
With stablecoins, we have the opportunity to expand the power of the USD in the Blockchain market, creating a transparent and sustainable financial platform.
– Jeremy Allaire, CEO Circle, 2021.
(Jeremy Allaire, CEO Circle, 2021)
The UK and the choice between control or freedom in cryptocurrency policy?
While the European Union and China focus on developing central bank digital currencies (CBDCs) with payment control and strict transaction monitoring features, stablecoins belong to private companies, ensuring transparency and user ownership.
The UK is still uncertain about which direction to take due to the lack of a clear strategy, affecting market developments and technology investments.
Frequently Asked Questions
What is a stablecoin?
Stablecoins are cryptocurrencies designed to maintain a stable value, often pegged to fiat currencies or real assets to reduce price volatility.
Why is the enactment of Stablecoin laws important?
Stablecoin laws help establish a transparent legal framework, protect users while facilitating innovation and attracting investment in the cryptocurrency sector.
Why is the UK slow in enacting stablecoin laws?
Due to the lack of coordination and prioritization from the government after Brexit, along with caution and a lack of understanding of the potential of stablecoins, the UK has always been in a state of research rather than action.
How do stablecoins affect the Blockchain ecosystem?
Stablecoin is a foundational currency that facilitates stable transactions, developing DeFi, NFT, and other Blockchain applications, making them more accessible to global users.
Will stablecoins replace fiat currency?
Stablecoins supplement rather than replace fiat currency; they create Blockchain transactional utility while maintaining the necessary stability for financial markets.
Source: https://tintucbitcoin.com/stablecoin-anh-quoc-lac-hau-xu-huong/
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