UK Urged to Develop Distinctive Crypto Regulation Framework

The United Kingdom has an opportunity to establish a unique crypto regulatory framework by integrating elements from the European Union's Markets in Crypto-Assets Regulation (MiCA) and the United States' new stablecoin framework, according to Circle's policy chief Dante Disparte. During a meeting with the House of Lords Financial Services Regulation Committee, Disparte emphasized the importance of combining clarity, definitions, licensing, governance, and consumer protection from the EU with the innovative aspects of the U.S. Genius Act. According to Cointelegraph, Disparte warned that the lack of a regulatory framework could drive stablecoin activities offshore, increasing exposure for UK users and potentially undermining London's status as a global financial innovation hub. The meeting was part of an inquiry into the growth and proposed regulation of stablecoins in the UK, with Disparte and Jesse McWaters from Mastercard serving as witnesses. The UK's Financial Conduct Authority (FCA) is currently consulting on a broader crypto asset regime, which is expected to be implemented on October 25, 2027. This regime will require companies engaging in new regulated activities to obtain authorization. Disparte addressed concerns regarding stablecoins potentially depleting bank deposits and reducing demand for traditional credit lines. He argued that a clear regulatory framework could mitigate these risks while fostering innovation by adopting robust reserve and liquidity standards and encouraging bank participation. Disparte highlighted Circle's growth across currencies and jurisdictions as evidence that trusted stablecoins expand markets rather than shrink them. He proposed four governing principles for the UK's regulatory framework: 1-to-1 reserve backing, high-quality liquid reserves, enforceable redemptions, and strong transparency standards. Circle is the issuer of USDC, the world's second-largest stablecoin by market capitalization. Mastercard's Jesse McWaters expressed skepticism about stablecoins' ability to threaten payment cards, citing their lack of a clear value proposition that would drive customer adoption over existing domestic payment options. However, he acknowledged their potential to accelerate cross-border transactions. McWaters praised blockchain technology, the underlying infrastructure for stablecoins, as a new and innovative method for moving money, particularly in international contexts. The U.S. federal stablecoin framework, known as the GENIUS Act, was enacted on July 18, 2025, while the EU's MiCA framework, the first comprehensive regulatory framework for the crypto industry, became effective for crypto-asset service providers on December 30, 2024.