Cryptocurrencies, and more specifically their underlying blockchain technologyhave moved from a solution in search of a problem to a solution in the hope of some regulatory clarity.
Along the way, the market capitalization of the sector has leaps north of 3,000 billion dollars.
As the global economy moves toward new applications of blockchain technology and digital assets, regulations in the United States, United Kingdom and European Union emerge as essential. referees of the future of Web3 infrastructure for payments and commerce.
While each jurisdiction approaches the regulation of digital assets with its own own priorities, implications for businesses take advantage of these technologiesespecially those that operate internationally, are large and complex, potentially paving the way for new standards in business-to-business (B2B) payments and cross-border transactions.
Regulatory ambiguity has slowed blockchain adoption, particularly for companies looking to adopt it. strategies such as the integration of stablecoins in supply chain finance or for real-time cash management and cross-border payments.
Learn more: Why banks might want to have blockchain Strategy
Developments in Crypto Regulation
The United States is a critical market for digital assets, but it faces challenges due to its fragmented regulations.
Yet for crypto players, hope has appeared. PYMNTES covered how the US government and state level agencies are supposed to reduce enforcement of the cryptocurrency industry under President-elect Donald Trump. Asset se would have East meeting with Coinbase CEO Brian Armstrong to discuss staff appointments for the new administration.
Trump emphasized during his campaign that if elected, he would form a presidential advisory commission focused on bitcoin and crypto and developing transparent regulatory guidelines in the industry, after years of what industry players said. industry have referred to as “regulation by enforcement” under the United States. Securities and Exchange Commission (SECOND).
“The largest financial institutions are eager to explore tokenized assets”, Nikola Plécasmarketing manager at Visa Crypto, says PYMNTES, but they noted that they need regulatory certainty to do so.
To date, questions about whether cryptocurrencies and digital assets, including stablecoins, should be regulated as securities or banking instruments stay without response. The uncertainty has prompted some crypto companies to focus on cross-border requestsleveraging blockchain to bypass traditional financial intermediaries.
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Find a balance
“Blockchain solutions and stablecoins – I don’t like to use the term crypto because it’s more about FinTech – they found product-market fit in cross-border payments, » Sheraz Sherepayments and commerce GM to Solana Foundationtold PYMNTS. “You get disintermediation, you get speed, you get transparency, you get extremely weak cost.”
Stablecoins remain at the center of regulatory discourse, with implications for cross-border payments. Their ability to streamline transactions and reduce costs is particularly attractive to companies operating in international markets.
Already, the EU implementation of the Cryptoasset markets MiCA’s stablecoin provisions put the EU at the forefront crypto regulationwhile the The British government announced last autumn its intention to introduce fiat-backed stablecoins under the supervision of the Bank of England, the Financial Conduct Authority and the Payment Systems Regulator.
However, greater global regulatory interoperability will be crucial to unlocking their full potential.
“The main obstacle to widespread adoption of stablecoin outside of the crypto ecosystem, there is the lack of regulatory frameworks,” Tony McLaughlinemerging payments to Citi Servicestold PYMNTS.
Like PYMNTS covered earlierthe UK is striving to keep pace with the US and Europe and will consider a comprehensive regulatory framework for the cryptocurrency sector in early 2025. The country’s Labor Party, which came to power in July, will draft rules who will understand stablecoins and staking services, with possible consultation stablecoins article due of the Financial Conduct Authority early 2025.
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