Stablecoin Tether and Circle’s USDC dominate the market, with a combined value of over $280 billion. U.K. crypto firms urge the government to establish a national stablecoin strategy to prevent falling behind the U.S. in adopting this disruptive technology, citing concerns about regulatory definitions and potential economic advantages.

In an open letter to Finance Minister Rachel Reeves, 30 industry figures emphasized the need for a proactive and coordinated approach to embrace stablecoins as financial infrastructure. The U.K. Treasury department has not commented on the issue. Industry insiders argue that the current regulatory stance puts the U.K. at a disadvantage in the global financial services landscape.

Despite the potential benefits of stablecoins, concerns remain about regulatory hurdles and technological failures. In 2022, the collapse of the stablecoin terra and its sister token luna caused USDT’s value to temporarily drop below its $1 peg. HSBC’s head of digital assets research sees stablecoins as a bridge between traditional finance and digital assets, but emphasizes the importance of a supportive regulatory environment for adoption.

Read more at CNBC: Crypto firms urge UK to form national stablecoin strategy