PriyankaThe United Kingdom is taking significant steps to future-proof its legislative framework for cryptocurrency adoption, a trend already embraced by numerous countries worldwide.
Cryptocurrency adoption is progressing slowly but surely. The initial wave was marked by the introduction of Bitcoin and Ethereum ETFs, which dramatically impacted the financial market. These ETFs not only served as market stabilizers but also opened the door for traditional investors to engage in the crypto space. Now, the UK has taken a landmark step by officially recognizing Tether ($USDT) as a form of property.
Let’s delve deeper into this development and explore its potential ramifications for the cryptocurrency industry.
Following a recent government bill that aimed to classify NFTs, cryptocurrencies, and carbon credits as personal property in the UK, the High Court acted swiftly. The urgency likely stemmed from a desire to expedite the regulatory framework and align it with the burgeoning crypto landscape.
The presiding judge declared that $USDT represents “a distinct form of property not premised on an underlying legal right,” indicating that it could be subject to tracing and qualify as trust property, similar to other forms of property.
English law governs approximately £250 billion in global acquisitions and mergers, with 40% of these involving global corporate arbitrations. Updating the legal framework to encompass crypto assets is a proactive measure to ensure the UK’s continued financial stability on the international stage.
Justice Minister Heidi Alexander emphasized the importance of staying abreast of the latest advancements in cryptocurrency technology.
In April 2022, the UK Treasury outlined a comprehensive strategy for regulating crypto assets and stablecoins. This strategy is set to unfold in two distinct phases:
1. The initial phase involves amending the Electronic Money Regulations (2011) and Payment Services Regulations (2017) to facilitate fiat-backed stablecoin payment methods. This encompasses the issuance and custody of crypto assets, as well as the operation of crypto exchanges.
2. Unlike the EU’s Markets in Crypto-Assets Regulation (MiCAR), the UK’s regulatory framework will not encompass services that provide advice on crypto assets or portfolio management services.
Currently, Phase 1 appears to be in motion, with $USDT now recognized as a form of property under UK law. This demonstrates the UK’s commitment to establishing a robust regulatory environment for cryptocurrency.
Unlike other nations, the UK has opted to regulate cryptocurrency by making targeted amendments to existing financial regulations. This approach aims to achieve a more focused legal acceptance of crypto-related activities.
Why did the UK start with Tether in its national crypto acceptance initiative? The answer is straightforward—$USDT is the largest stablecoin, boasting a market cap of $114.4 billion, which is 245% higher than that of the second-largest stablecoin, $USDC. With a 70% market dominance, $USDT has shown consistent growth over the years. Therefore, it’s no surprise that the UK chose Tether as its starting point.
Recently, Tether made headlines by investing $100 million in Adecoagro, a prominent Latin American agricultural company, acquiring a 9.8% stake. This investment is part of Tether’s broader strategy to diversify its portfolio beyond cryptocurrency. The company has already ventured into several sectors, including Bitcoin mining, green energy, education, and artificial intelligence.
Cryptocurrency is undoubtedly here to stay, whether in the form of Bitcoin, Tether, or other digital assets like World Liberty Financial. The future is undoubtedly intertwined with crypto technology.
It appears that the UK recognizes this reality and is proactively adjusting its legislation to accommodate it. Will these measures help the UK solidify its position within the global crypto community and decentralized finance (DeFi) landscape? Only time will tell.
