A group of thirty executives from major crypto companies has sent a letter to the UK Finance Minister calling for immediate regulation of stablecoins.
Call for the UK to Create a Stablecoin Strategy
The letter was sent on Wednesday, emphasizing the need for a national strategy, or the UK risks being left behind by countries that are rapidly advancing their crypto infrastructure, particularly the US.
Crypto executives assert that the UK must act now, or it will become a 'rule-taker' rather than a 'rule-maker' in the digital asset era.
Criticism of Stablecoin Definition in the UK
One of the major concerns is the current definition of stablecoins in UK law. Regulators describe them as 'crypto-assets with reference to fiat currency,' a phrase that causes discomfort among executives. The letter argues that this definition is outdated and misleading.
Executives insist that stablecoins should be viewed for what they actually are—functional digital payment mechanisms already integrated into global financial flows.
Stablecoin Market Size and Need for Regulation
Crypto experts also pointed to the small size of the pound-pegged stablecoin market as a symptom of ineffective regulation. While the global stablecoin market has surpassed $280 billion, the market cap for all pound-linked stablecoins stands at just £461,224, significantly lesser compared to dollar-backed stablecoins.
Industry analysts like Daragh Maher from HSBC note that stablecoins serve as the 'cash equivalent' in crypto and are essential for facilitating fast transfers using blockchain technology.
Crypto leaders emphasize the need for a well-structured regulatory environment to integrate stablecoins into the UK’s financial system to maintain its global financial leadership.
