Few United Kingdom crypto users are using stablecoins to buy anything, South Korea missed its stablecoin legislation deadline, and Pakistan wants its own rupee-backed token.
Last week saw a cross-party group of U.K. parliamentarians sign a joint letter urging Chancellor Rachel Reeves not to proceed with the government’s current plan to regulate stablecoins.
The letter argues that the current plan represents “a fragmented and restrictive approach that will deter innovation, limit adoption, and push activity overseas.” (The letter echoes the same arguments that U.S. crypto lobby groups have been making for years, suggesting that the recent joining forces of U.S./UK pro-crypto advocates is already having an impact.)
Among the letter’s criticisms is the plan to impose a cap on stablecoin holdings for both individuals and entities. The caps, which the government has insisted would be temporary until it’s satisfied there’s no negative market impact, would limit stablecoin ownership to £20,000 ($26,800) for individuals and £10 million ($13.4 million) for businesses.
Crypto advocates have also griped about requirements for ‘systemic’ stablecoin issuers to hold 40% of their fiat reserves in “unremunerated Bank of England accounts.” Since stablecoin issuers make nearly all their revenue from interest on the fiat reserves backing their issued tokens, critics claim this 40% policy makes their business unviable.
Chancellor Reeves was already said to have been frustrated by the Bank of England’s (BoE) go-slow approach to stablecoins. Last month, the BoE said it could exempt certain businesses from the caps, including supermarkets serving retail customers and digital asset exchanges, recognizing their need to hold larger balances than other businesses.
Then, on December 15, Reeves abruptly announced plans to bring digital assets under existing financial governance. Crypto firms will be required to register with the Financial Conduct Authority (FCA) and be subject to the same transparency standards as other FCA-registered entities, but consumers will enjoy the same levels of protection granted to other regulated assets.
Reeves said “bringing crypto into the regulatory perimeter is a crucial step in securing the UK’s position as a world leading financial center in the digital age.” The plan is to preview the new regime next year before it takes effect sometime in H2 2027.
Accordingly, the FCA has launched three separate consultations seeking input on how the new rules will be crafted, including one with appropriate scope for all your ‘leave stablecoins alone’ rants.
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UK stablecoin survey shows it’s still mostly about token trades
The FCA just issued its latest consumer research into digital assets, which found overall crypto ownership in the U.K. at 8%, down sharply from 12% last year. Among respondents who previously owned or currently own digital assets, awareness of stablecoins remains high (58%), but this figure drops to 12% in the ‘crypto aware’ group.
Interestingly, 61% of crypto users from an ethnic minority background gave correct answers on what a stablecoin is, versus just 49% for users with white ethnicity. Similarly, ethnic minorities (38%) were more likely to have purchased stablecoins than whites (22%).
This disparity could indicate greater awareness among immigrants who use stablecoins to send remittances to family in their countries of origin. However, ethnic minorities were also overly represented (19%) among owners of any digital asset than their white counterparts (7%), so perhaps not.
Regardless, buying stablecoins to send to friends/family was cited by just 11% of crypto users, and that figure was down nine points from the 2024 survey. In fact, nearly all reasons for buying stablecoins showed year-on-year declines except the most popular reason: for use on crypto trading platforms when buying/selling other tokens, which gained two points to 50%.
Store-of-value reasons for buying stablecoins ranked second with 43% (-5), followed by trade or exchange into cash (26%, -4), a means of payment (25%, -6), saving on costs for foreign exchange (21%, -6), buying other goods/services (17%, -10), and buying other financial products (15%, -12).
Among crypto users, awareness of the two largest stablecoin issuers, Tether and Circle (NASDAQ: CRCL), remains relatively high, at 47% and 38%, respectively. But awareness of Tether’s USDT was down three points from 2024, while Circle’s USDC slipped one point. And 14% of crypto users reported holding some USDT, down four points from 2024, while ownership of Circle’s USDC gained one point to 10%.
As for what considerations might encourage individuals to acquire/use stablecoins, being regulated by the FCA ranked highest with 29% (+3), followed by having Financial Services Compensation Scheme coverage if an issuer went belly-up (25%, +2).
Other major considerations are equally based on fear, including having confidence that a stablecoin can be redeemed for its full value (25%, +2) and being confident that stablecoins are backed 1:1 with fiat reserves (24%, +3). You have to wait until reason #5 to get something involving an actual use case, like ‘being able to buy goods/services’ (23%, +3).
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US regulators: ‘We’ve always been cool with stablecoins, man’
On the other side of the pond, the 2025 annual report from the U.S. Financial Stability Oversight Council (FSOC) says it “supports full implementation of the [stablecoin-focused] GENIUS Act and monitoring the related growth of payment stablecoins as a growing source of demand for Treasuries.”
The report, which was released last week, marks a significant adjustment from the FSOC’s previous position, which featured significant concerns over stablecoins’ potential to inflict damage on the wider financial system. Last year’s FSOC report contained warnings that stablecoins were vulnerable to ‘bank runs’ and that market concentration among a couple of issuers could amplify systemic risk if one of these issuers were to go belly-up.
Last year, FSOC threatened to go it alone if Congress couldn’t agree on basic guardrails governing stablecoin use. But with GENIUS now law of the land, FSOC’s new view is that the U.S. has taken “a critical first step toward establishing a comprehensive regulatory structure for the digital asset industry.”
FSOC recognizes that stablecoins help criminals facilitate their crimes, and believes U.S. law enforcement “should have the tools and authorities to hold those using digital assets for illegal activities accountable.” But this year’s report contains none of the references to governance failures at crypto firms, the billions lost to crypto-related fraud, and terrorists’ use of stablecoins.
Instead, FSOC now cites industry stats that show illicit activities account for a relatively small percentage of stablecoin use. Accordingly, FSOC insists that crime-fighting tools, while necessary, “should never be misused to target the lawful activities of law-abiding citizens.”
FSOC was set up following the 2008 global economic meltdown, and its members include the Treasury secretary, along with the chairs of the Federal Reserve, Comptroller of the Currency, Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), and more.
Also casting a vote on FSOC matters is the chair of the Federal Deposit Insurance Corporation (FDIC), which just announced a 60-day comment period on its proposals to permit banks to issue their own stablecoins.
Specifically, the FDIC is proposing rules that would “establish a tailored application process for an FDIC-supervised institution to obtain approval from the FDIC to issue payment stablecoins through a subsidiary. The FDIC seeks to evaluate the safety and soundness of an applicant’s proposed activities based on consideration of statutory factors and support the responsible growth and use of digital assets and related technologies while minimizing the regulatory burden on applicants.”
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South Korea misses stablecoin deadline
In South Korea, the country’s financial regulator failed to meet a deadline for submitting a draft of the ruling Democratic Party of Korea’s proposed stablecoin legislation to the National Assembly’s Political Affairs Committee.
The DPK had asked the Financial Services Commission (FSC) to submit the draft by December 10, but South Korean media outlet Newsis quoted an FSC official saying the regulator “needed more time to coordinate their positions with relevant agencies.”
More time is required due to unresolved issues between the FSC and the Bank of Korea (BoK) over who will be permitted to issue won-backed stablecoins. The BoK wants a consortium of banks to hold a minimum 51% share of all would-be issuers, while the FSC wants private companies—including many of the country’s internet giants—to play a greater (and more independent) role.
The BoK also doesn’t want the FSC to have sole responsibility for approving stablecoin issuers, preferring unanimous agreement from a policy consultative body consisting of all relevant organizations—the BoK, FSC, Ministry of Strategy and Finance, etc.—that might be impacted by stablecoin growth.
Yonhap Infomax quoted a representative from the ruling Democratic Party of Korea’s Digital Asset Task Force saying what the Task Force “values most is innovation. Many risk factors can be addressed through institutional means. It is crucial to enact laws that can foster innovation.”
This ongoing turf war could complicate the government’s efforts to formally submit its stablecoin bill (tentatively titled the Basic Digital Asset Act) to the legislature by the end of January. The DPK has set a meeting with the Task Force for December 22 to firm up its plans, which could include going rogue and submitting legislation that bypasses the regular process.
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Australia eases stablecoin intermediary rules
Last week, the Australian Securities and Investments Commission (ASIC) announced “class relief for intermediaries engaging in the secondary distribution of certain stablecoins and wrapped tokens.” The change exempts intermediaries from having to hold separate Australian Financial Services (AFS), Australian Market, or clearing/settlement facility licenses when providing services related to eligible stablecoins or wrapped tokens.
For the record, eligibility is based on a number of criteria for “a non-cash payment facility,” including the issuer being eligible (which requires an AFS license authorizing stablecoin issuance, unless you’re an “exempt foreign issuer” that “does not carry on a financial services business in this jurisdiction”), the issuer maintaining adequate reserves and performing satisfying ‘know your customer’ checks, plus other considerations.
ASIC also said providers can now hold tokens that qualify as financial products in omnibus accounts, provided they abide by certain record-keeping arrangements and reconciliation procedures.
ASIC said it was acting due to concerns over the costs and compliance burdens on distributors associated with applying for one or more licenses. This step was previewed in October, when ASIC issued a statement updating the variety of digital asset products it considers financial products requiring ASIC licensing.
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Pakistan will “definitely” launch a stablecoin
Finally, Pakistan will “definitely launch” a stablecoin, according to Bilal bin Saqib, chair of the Pakistan Virtual Assets Regulatory Authority (PVARA). PVARA is a federal body comprised of the governor of the State Bank of Pakistan and the chairs of Pakistan’s Securities and Exchange Commission and its Federal Board of Revenue.
Saqib made the comment at the recent Binance Blockchain Week event in Dubai, saying it was “a great way to collateralize the government debt. We want to be at the forefront of this financial digital innovation that is happening.” Saqib also revealed the country was prepping a central bank digital currency (CBDC) pilot program.
Saqib is a member of Pakistan’s Crypto Council, whose other members include Changpeng ‘CZ’ Zhao, founder of the Binance exchange. On December 12, Pakistan’s Ministry of Finance announced the signing of a non-binding memorandum of understanding with Binance to “assess modern, compliant blockchain infrastructure,” including the possibility of tokenizing up to $2 billion in state-owned assets.
Pakistan also made progress on its plan to establish a local licensing regime for digital asset exchanges by issuing ‘no objection certificates’ for the applications of Binance and HTX. The move clears the way for the pair to establish local entities, register with local anti-money laundering units, and submit formal license applications.
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Watch | Spotlight On: Centi Franc—the truly stable stablecoin
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Source: https://coingeek.com/uk-stablecoin-survey-shows-its-still-all-about-token-trading/
