Key facts
- The US and UK have established a joint position on stablecoin regulation.
- The agreement aims to support cross-border payments, ensure protected reserves, and provide clearer market access.
- Both governments intend to support the use of stablecoins in cross-border finance, including payments and capital market transactions.
- Stablecoins must be fully backed on a one-to-one basis with high-quality, liquid assets.
- Reserve and liquidity standards will aim to reduce risk without creating unfair barriers to entry.
- The framework includes provisions for custody, reserve segregation, and timely redemption for stablecoin holders.
- Stablecoin holders are to have protected claims in insolvency or restructuring processes.
- President Donald Trump is pushing for the passage of the CLARITY Act before the Senate recess.
- Banking groups have raised concerns that the CLARITY Act's language is ambiguous and could lead to deposit flight.
The United States and the United Kingdom have reached a consensus on stablecoin regulations, aiming to facilitate cross-border financial transactions. This joint position, developed through the Transatlantic Taskforce for Markets of the Future, supports the use of well-regulated stablecoins for faster payments, enhanced competition, and modern financial systems.
The agreement emphasizes that stablecoins functioning as money must be fully backed on a one-to-one basis by high-quality, liquid assets. Reserve and liquidity standards are intended to mitigate risks without creating undue barriers to entry or hindering cross-border competition. Key focuses include custody, segregation of reserve assets from company funds, and ensuring timely redemption for stablecoin holders. In cases of insolvency or restructuring, both governments support clear legal claims for stablecoin holders, granting them priority over other creditors, subject to national laws.
This development coincides with President Donald Trump's renewed push for the Senate to pass the CLARITY Act before its August recess, as part of his initiative to establish the U.S. as a global leader in cryptocurrency. However, banking industry groups have voiced concerns that the bill's current language remains ambiguous and could create loopholes, potentially encouraging a shift of deposits from traditional banks to stablecoins, thereby increasing pressure on smaller regional lenders.