Stablecoin Tether and Circle USDC dominate the market.
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The UK needs to establish a national stubcoin strategy to enable token adoption and avoid falling into the US with disruptive new technologies, several major crypto companies said Wednesday.
In an open letter to Finance Minister Rachel Reeves, figures from the 30 crypto industry said the UK “must act now to avoid being a rule taker, not a rule maker in the digital asset age.”
“We believe that a positive and coordinated national strategy is needed to ensure that the UK is on the forefront, positioning stubcoins as a responsible acceptance rather than a risk of containing them,” the letter said.
The UK Treasury could not immediately comment when contacted by CNBC.
Stablecoins are a type of cryptocurrency that is fixed in existing government-supported currencies. There are several standard coins in the issuance, but the most commonly known are Tether’s USDT and Circle’s USDC. Both are tied to the US dollar.
According to Coingecko data, the overall Stablecoin market is worth over $280 billion. However, for Stablecoins, which are pinned to the British pound, their total market capitalization is only 461,224 ($621,197).
Crypto industry insiders say they have problems with UK stubcoin stubcoin stubcoin , which puts the situation in early industries and in financial services in the UK.
One aspect of the UK’s approach that worries the industry is the legal definition of stubcoin as a “crypto asset reference to Fiat currency.”
“This definition focuses on form rather than function,” they said in an open letter Wednesday. “This is similar to defining a check as paper with reference to currency, if both are negotiable instruments backed by a regulated issuer.”
The national Stablecoin strategy will strengthen the UK’s role as a global financial centre, generate new fees and foreign exchange revenue streams, and support the demand for gold leaf through new digital channels, signers said.
The letter was signed by industry executives from Coinbase, Kraken, Copper, Fireblocks, Bitgo and Vaneck.
Still, stablecoins are not without concern.
In 2022, Terra and his sisters’ stubcoin named Luna fell to $0 after a failure in the underlying technology of cryptocurrency. Additionally, the USDT’s value temporarily fell below the $1 peg. USDT is currently worth $1.
In a research note published Wednesday, Daragh Maher, head of digital assets research at HSBC, wrote that Stablecoins will help bridge the gap between traditional financial and digital assets.
“They are basically cash equivalents to digital assets,” Maher argued. “They are references or base currencies for almost all crypto assets, and can also be used to transfer money using blockchain payrails rather than traditional banking techniques.”
However, he added that regulatory issues continue to be the biggest hurdle for stable recruitment. “The key to exploiting the possibilities of stubcoin is to create the right regulatory environment for the sector,” Maher said.
