Stablecoin market ‘clamouring’ for regulatory certainty amid ongoing ‘stigma’

Digital asset and fintech sector representatives at an event in London have spoken of a ‘clamour’ among companies for greater regulatory certainty to further encourage global adoption of stablecoins.

Governments and financial regulators are introducing rules and frameworks for stablecoins at different paces and in different ways around the world, leaving many private-sector organisations with an interest in capitalising on the growing stablecoins market frustrated at what they perceive as slow and inconsistent rulemaking.

The European Union (EU’s) landmark Markets in Crypto-Assets (MiCA) regulation (also abbreviated to MiCAR) came into full force in December 2024, putting the 27-member bloc in the vanguard in respect of multi-country jurisdictions. Momentum towards establishing a comprehensive federal regulatory framework for payment stablecoins is also building in the US under president Donald Trump, with the bipartisan Guiding and Establishing National Innovation for US Stablecoins Act of 2025 (the GENIUS Act) having been introduced to Congress in February.

Regulations for stablecoins to be used as payment means are also in the works in the UK, where the government, alongside the Financial Conduct Authority (FCA) and Bank of England (BoE). The FCA issued a ‘crypto roadmap’ in November 2025 that flagged a consultation paper on stablecoins during ‘Q1/Q2’ 2025.

Private-sector representatives discussed political and policy angles during a half-day ‘Stablecoin Symposium’ event in London. Speakers were frequently united in a perspective that swifter, clearer and more consistent regulation would provide a fillip to their own operations and help sustain already rapid global growth of a sector that is currently dominated by US dollar-pegged tokens such as Tether’s USDT and Circle’s USD Coin.  

STABLECOINS: EXPLAINED Stablecoins are cryptocurrencies designed to maintain a stable value by having their market value pegged to an external reference, typically fiat currency.

‘Clearly a lot of uncertainty’

Representatives from four companies – Fireblocks, Eurodollar, ClearBank and NOBO – explored what was billed as ‘the need for a more diverse stablecoin ecosystem and its potential to reshape global finance’ during a 45-minute panel session titled ‘Beyond the dollar: stablecoins, geopolitics and the future of money’.

“There’s clearly a lot of uncertainty at the moment, and they [stablecoin issuers] are all clamouring for certain degree of certainty,” said Varun Paul, senior director for financial markets at Fireblocks, a New York City-headquartered digital assets infrastructure company, on the topic of stablecoin regulation globally.  

“MICA’s done a really good job in Europe, and when we look at what’s happening in the US [momentum under the Trump presidency], it really helps drive the conversation,” Paul continued at the event, which was held on 18 March.

“We’re seeing – all over the world right now – industry participants trying to engage with the regulator[s] and [saying] ‘give us a clear roadmap’ because without it the banks and the non-banks in the same space don’t know where they stand; don’t know what the rules should be and whether they’ll get in trouble for it. But they’re all asking because they can see the opportunity,” he said.

“There’s lots of people queuing up saying: ‘Can I do this and tell me what I’m allowed to do in this country, it’s a very different regime in Singapore versus Europe versus the US, tell me where I stand and allow me to do so,’” Paul – who moved to Fireblocks from a role heading the BoE’s fintech hub three years ago – added.

RELATED ARTICLE EU crypto regulation MiCA comes fully into force – a news story (30 December 2024) on the EU’s MiCA/MiCAR

‘Stigma’ persists

Kam Dylan, deputy chief executive of Eurodollar, a Denmark-headquartered group of companies, highlighted the “two-fold” challenges of regulatory and operational considerations.

“The regulatory piece needs to be there and sets the framework, and that’s what we’ve seen with MiCA. But we also need the traditional banking industry to catch up also, and I think there needs to be a shift in terms of how the risk is apportioned, for example, to stablecoin issuers. That’s what we’re talking about here. But there still seems to be this stigma around digital assets and crypto, even though now, technically, stablecoin issuers in Europe, are related entities. You’re not really seeing the banking services catch up with that.”

“We need bridges between traditional finance and digital finance and on-chain finance. Without that, adoption will struggle,” she added (‘on-chain’ being a reference to blockchain – the technology that underpins stablecoins).

Sean Forward, business manager for digital currency at ClearBank, a cloud-based clearing bank headquartered in the UK and which secured a Dutch (European) licence last year, said that MiCA had “enabled… ClearBank to evaluate what’s going on and identify what the next steps are for digital clearing.”

“We then look at where the UK is – we [the UK] currently don’t have regulation around stablecoins,” he continued. “The FCA have kindly given us a roadmap of when we’re likely to get that, and I think that the undercurrents within the sector, as it is at the moment, are trying to accelerate that roadmap […] particularly with the push and the drive from the US and the new Trump administration [in favour of legislation seen as ‘pro-crypto’] to where we’ve got UK legislation around not just stablecoins but tokenisation more broadly,” Forward said.

RELATED ARTICLE Wyoming ‘rapidly advancing’ towards stablecoin issuance – a news story (11 February 2025) on the US’s least populous state aiming to issue the first fiat-backed, fully-reserved stablecoin issued by a public entity in the US (the ‘Wyoming Stable Token’) – a groundbreaking digital money programme for the public sector

Criminality and governments’ power

Discussion during the session took in topics including technology-specific considerations; perceptions of cryptocurrencies’ association, in some quarters, with enabling criminality; and trust in governments and central bank digital currencies (CBDCs).

“My biggest fear with the state of play right now is regulation pushing against public blockchains,” Paul said. (Public blockchains allow anyone access in contrast to private blockchains, which are restricted to selected or authorised users). “As things stand today, banks are really, really heavily punished for touching anything on a public blockchain. That becomes a real barrier to banks issuing something on a public chain. It makes it very difficult for them to interact with anything that looks like a stablecoin across the public chain.”

On the financial crime point, Dylan described “the notion that criminal activity primarily happens in crypto or digital assets” as “misplaced.”

“I think we’ve seen [that], in history, there’s probably a lot more criminal activity that’s happening in fiat,” she said. “I think when there are new forms or methods of mediums of exchange, it’s inevitable that there will be activity that needs to be supervised, and that’s where regulation also plays a role.”

An audience member said an “assumption [in wider society] that all government is good” was “being challenged at the moment, significantly” and asked “how we protect against a bad-actor government using the programmable nature of CBDCs for warfare.”

“If you don’t trust your government with digital currency, can you trust them with a fiat currency?” responded Ayo Ojerinloa (second left in photo), founder and chief executive of fintech start-up NOBO. “Your bank can [already] freeze your bank accounts, your government can [already] revoke your citizenship – there’s all sorts of things that can [already] happen now. I don’t think it’s a digital currency issue, I think it’s more a trust issue.”

‘Rule of law and society norms’

Discussion continued at the nexus of digital money and politics, with Paul describing the US as “very anti-CBDC” (Trump signed an executive order on digital financial technology in January that included stating that his administration would ‘tak[e] measures to protect Americans from the risks of CBDCs, which threaten the stability of the financial system, individual privacy, and the sovereignty of the United States, including by prohibiting the establishment, issuance, circulation and use of a CBDC within the jurisdiction of the United States.’)

“I don’t think it’s the technology that’s the problem,” said Paul. “I think the thing that protects us from governments today – and not all governments are good governments – is the rule of law and societal norms.”

“When the UK government 20-odd years ago tried to put national ID cards in the country, there were people on the street saying, “I don’t want to be a barcode”. That stopped it dead in its tracks,” he continued. “Three or four years ago, in Canada, the government went after Canadian truckers [who were] on strike and took control of their bank accounts [a reference to a 2022 episode when authorities froze the finances of people believed to be involved in protests in capital city Ottawa].”

“We need to use the technology but realise that the rule of law is critically important, and if the government in future wants to change that law, then they have to change that law in order to go after us as citizens. And then we have the societal norms again to protect us,” he continued.  

“What we do need to do, though, is use the technology to protect ourselves as much as possible, and the benefit, actually, is that central bank digital currency can be privacy enhancing not just privacy protecting,” he added.

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Government debt and stablecoins

The session came to a close with Paul making a point about US government finances and stablecoins.

“A huge amount of ownership of government debt is being driven by Tether and Circle,” he said.

“As adoption of these stablecoins drives up, you get increased demand for US Treasuries [for example bonds, which are issued to finance government activities]. Actually, that is another transmission mechanism for monetary policy. And what we’re seeing in this geopolitical dimension is, as there’s an increase in demand for US dollar stablecoins, it’s actually driving, I think, increased demand for government debt, which [will be] pulling down interest rates for the US government in the future.”

“That’s another real reason why governments around the world will want to see their own currency-issued stablecoins to ensure that they are not priced out of that global market.”

The conference was organised by Unblocked, which runs blockchain-focused events, and hosted by law firm CMS.