{"id":6341,"date":"2026-02-05T04:44:09","date_gmt":"2026-02-05T04:44:09","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=6341"},"modified":"2026-02-05T04:44:09","modified_gmt":"2026-02-05T04:44:09","slug":"uk-lawmakers-hear-skepticism-on-stablecoins-as-lords-launch-regulation-inquiry","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=6341","title":{"rendered":"UK Lawmakers Hear Skepticism on Stablecoins as Lords Launch Regulation Inquiry"},"content":{"rendered":"

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  • A public session of the UK\u2019s House of Lords Wednesday heard criticism of stablecoins including that they\u2019re virtually useless outside of on- and off- ramping between fiat and crypto.<\/span><\/li>\n
  • Financial Times economics writer, Chris Giles, argued that stablecoins are unlikely to have much impact on the broader UK financial system and suggested they\u2019re heavily used in crime, calling them \u201cnew suitcases of cash.\u201d<\/span><\/li>\n
  • US law Professor Arthur E. Wilmarth Jr. called the passage of the GENIUS Act in the US a \u201cterrible, disastrous,\u201d mistake but was hopeful the UK\u2019s stablecoin regulatory strategy would be more thoughtful.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n

    A public session of the UK\u2019s House of Lords Wednesday heard damning criticism of stablecoins, with one witness claiming they\u2019re mainly used as on- and off- ramps for \u201cworthless\u201d crypto and are likely to play only a minor role in the nation\u2019s financial future. The session was part of a UK parliamentary inquiry into how stablecoins should be regulated.<\/p>\n

    Testifying before the House\u2019s Financial Services Regulation Committee (FSRC), Financial Times economics writer Chris Giles said that stablecoins had failed to capture any real momentum or adoption in the UK because of a lack of \u201cclear legal underpinning and clear regulation,\u201d making them a high-risk asset to hold.<\/p>\n

    Giles said he doubted that stablecoins could meaningfully displace the role of banks in the UK financial system, given that banks already offer very low-cost and almost instant money transfers.<\/p>\n

    He argued the only real role for stablecoins is as on- and off- ramps into crypto, which he described as an \u201cintrinsically worthless asset,\u201d and \u201cnot massively interesting or going to take over the world.\u201d<\/p>\n

    The Financial Times commentator also argued that if stablecoins are to be used essentially as new payment rails, there\u2019s no reason they should pay a yield. He said concerns about yield-bearing stablecoins disrupting the broader economy are overblown and that interest-bearing current accounts already exist and they haven\u2019t \u201ctaken over the whole of our financial system.\u201d\u00a0<\/p>\n

    Stablecoins should be regulated as money, according to Giles, with strict collateralisation rules and a liquidity safety net to deal with sudden sell-offs. Giles also claimed stablecoins are particularly attractive for illicit use, characterising them as \u201cnew suitcases of cash\u201d and arguing for more stringent Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.<\/p>\n

    Related: White House Pushes Crypto and Banks Toward Stablecoin Compromise<\/strong><\/p>\n

    GENIUS Act a Terrible Mistake, Argues Witness<\/h2>\n

    Another witness, US law professor Arthur E. Wilmarth Jr, told the hearing that, in his opinion, tokenised deposits are a superior alternative to stablecoins.<\/p>\n

    \n
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    I do not see [stablecoins] as a natural component of the financial system. To me, anything that stablecoins can do tokenised deposits can do better.<\/em><\/p>\n<\/div>\n

    \n Arthur E. Wilmarth Jr, US law professor <\/div>\n<\/div>\n

    Wilmarth also said he believed the passage in the US of stablecoin regulation known as the GENIUS Act was a \u201cterrible\u201d and \u201cdisastrous\u201d mistake, as it allowed non-banks to issue stablecoins.<\/p>\n

    \u201cI feel very strongly that a payment device like a stablecoin should only be offered by a fully regulated bank,\u201d Wilmarth said.<\/p>\n

    Related: Visa, Mastercard Play Down Stablecoins for Payments as Consumer Demand Falls Short<\/strong><\/p>\n

    Wilmarth described these non-bank issued stablecoins as a form of regulatory arbitrage whereby less tightly regulated issuers get into what he referred to as the \u201cmoney business,\u201d and undermine the regulatory framework that has been created \u201cover centuries within the banking system.\u201d<\/p>\n

    The law professor added that while the US made many unfortunate mistakes in its regulation of stablecoins, he believes the UK is pursuing a more thoughtful regulatory strategy.<\/p>\n<\/p><\/div>\n

    GENIUS Act,Regulation,Stablecoins#Lawmakers #Hear #Skepticism #Stablecoins #Lords #Launch #Regulation #Inquiry1770266649<\/p>\n","protected":false},"excerpt":{"rendered":"

    A public session of the UK\u2019s House of Lords Wednesday heard criticism of stablecoins including that they\u2019re virtually useless outside of on- and off- ramping between fiat and crypto. Financial Times economics writer, Chris Giles, argued that stablecoins are unlikely to have much impact on the broader UK financial system and suggested they\u2019re heavily used<\/p>\n","protected":false},"author":1,"featured_media":6342,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[2202,2205,199,217,2204,389,2203,282],"class_list":{"0":"post-6341","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-bitcoin","8":"tag-hear","9":"tag-inquiry","10":"tag-launch","11":"tag-lawmakers","12":"tag-lords","13":"tag-regulation","14":"tag-skepticism","15":"tag-stablecoins"},"yoast_head":"\nUK Lawmakers Hear Skepticism on Stablecoins as Lords Launch Regulation Inquiry - Crypto News: Latest Cryptocurrency News and Analysis<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptonews.uk.com\/?p=6341\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UK Lawmakers Hear Skepticism on Stablecoins as Lords Launch Regulation Inquiry\" \/>\n<meta property=\"og:description\" content=\"A public session of the UK\u2019s House of Lords Wednesday heard criticism of stablecoins including that they\u2019re virtually useless outside of on- and off- ramping between fiat and crypto. 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