UK Secretary to the Treasury Tulip Siddiq now expects stablecoin rules to emerge next year. Originally, stablecoin regulations were on the calendar for 2024.
Bloomberg reports that the delay is due to the change in government, and the new Labour leadership needs more time. Simultaneously, expectations are for a new “single overarching crypto regime” to be revealed. The news was revealed at a conference in London last Thursday.
Tulips and crypto—both have had their ups and downs, but at least I’m here to weed out the bad investments…..(I’ll get my coat) https://t.co/1DfK9PtYIV
— Tulip Siddiq (@TulipSiddiq) November 23, 2024
Laurent Descout, co-founder and CEO of Neo, commented on the delay, noting that stablecoins are emerging as viable forms of payment for goods and services in the real economy.
“Many see the huge potential they could bring from bypassing traditional payments’ inefficient and slow processes to the increased security, recordkeeping, and transparency. While the UK has delayed the rollout of a regulatory regime for stablecoins, which will now be included in a larger plan for crypto next year, treasurers should start preparing for stablecoin adoption if they haven’t already. This means staying abreast of the latest developments, having conversations about their viability, and considering digital wallets, which allow them to hold and utilize them. Those who don’t risk being left behind.”
While stablecoins gained traction as an on/off ramp for crypto trading, the real value is as a new form of payment. Stablecoins tied to fiat and overseen by regulators can be a big improvement over current payment rails – faster and less expensive for both sides of the equation. Stablecoins can also mitigate the concerns of CBDCs, which are central bank digital currencies. While CBDCs can provide value, conventional wisdom is the government will eventually leverage a CBDC to control behavior or monitor usage. China is already talking about this. An arms-length payment and transfer ecosystem where private firms can issue digital currency makes much more sense. A few months delay in the UK is worth it if policymakers get it right. With the change in the US administration and the removal of anti-digital asset regulators, many anticipate pro-crypto rules in 2025 – something the UK is keenly aware of.
