Enhancing Its Position

American dominance in the stablecoin sector is evident as U.S.-backed coins dominate, while British pound-backed stablecoins lag significantly behind at just a small fraction of the market total valued above $280 billion.

The recently passed GENIUS Act in the United States marks a pivotal step toward regulating stablecoins and solidifying their use within the country. This regulatory framework is seen as a key driver for U.S. leadership in this space.

A New Kind of Financial Infrastructure

Major crypto firms like Coinbase, Kraken, BitGo, and Fireblocks have urged the UK to reassess its stablecoin strategies. They advocate for a national stablecoin approach that treats these assets as foundational financial tools rather than risks.

This move is intended not only to prevent the U.K. from falling behind America but also to bolster London’s status as a global finance hub and generate new revenue streams.

According to a spokesperson from the UK Treasury, the nation plans to finalize its digital asset legislation by year-end, aiming to instill investor confidence and spur growth across the country.

Stablecoins are reshaping financial services with potential solutions for issues like cross-border payment inefficiencies and currency volatility. However, concerns about the U.S. dollar’s predominance have arisen, prompting some countries to explore central bank digital currencies (CBDCs).

While CBDCs issued by governments could address reserve-backed stability risks associated with private companies, they have faced reduced interest globally. Only a few nations have rolled out national CBDC programs, and many others have abandoned their plans in favor of stablecoins.

The U.K. itself has considered discontinuing its own digital currency initiative, deeming it more strategic to focus on other payment innovations at present.