Several experts questioned the potential of stablecoins as future currencies during a hearing in the UK House of Lords.
PANews reported on February 4th, citing Cointelegraph, that the UK House of Lords Financial Services Regulatory Committee held a hearing where several experts questioned the potential of stablecoins as future currencies. Chris Giles, economics commentator for the Financial Times, pointed out that the main reason stablecoins haven't gained widespread adoption in the UK is the lack of a clear legal and regulatory foundation, making it risky for households to hold them as currency. He believes that stablecoins currently primarily serve as a "gateway" for cryptocurrency deposits and withdrawals, rather than a "transformative" form of currency.
At the hearing, experts emphasized the necessity of strict regulation. Giles agreed with the Bank of England's approach of regulating stablecoins "like currencies," including strict asset-backed rules, resolution plans, and ultimate liquidity support. He also warned that stablecoins could be used for illicit activities, and that if their application expands, international regulation of exchanges and KYC/AML checks must be strengthened.
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