Following the progress and evolution of cryptocurrencies is always intriguing, especially whenever we consider how global financial markets are adapting to blockchain technologies.
But while some countries have moved swiftly with the times, the large majority continue to lag behind when it comes to introducing regulatory frameworks, which otherwise provide investors and consumers with greater protection.
Despite the volatility of leading cryptocurrencies like Bitcoin and Ethereum, they have already achieved widespread usage for investment and transactions. In the meantime, stablecoins have also emerged to disrupt the world of blockchain finance, particularly now that Tether (USDT) has become the most prominent stablecoin in financial circles.
Stablecoins have reduced the risk factor where crypto transactions are concerned, given they are tied to fiat currencies like the US Dollar. Now that third-party companies including UniPayment can provide safe and secure payment gateways, making a USDT payment couldn’t be easier, establishing confidence among buyers and vendors alike.
Nevertheless, even with the massive growth of Tether and other stablecoins during the last several years, there have been calls for major financial institutions and governments to embrace stablecoin regulatory frameworks. However, just six nations had legislation and regulatory frameworks in place by 2023.
Revealing Nature of the PwC Report
According to the PwC Global Crypto Regulation Report 2023, published on 19 December 2023, those countries are Switzerland, Mauritius, Japan, The Cayman Islands, Gibraltar, and the Bahamas. Interestingly, those countries have also introduced additional review regulations. These range from updated Anti-Money Laundering (AML) rules to new crypto regulatory frameworks.
Based on the PwC report findings, which studied the status of crypto regulations in 35 countries, even major countries like the United States and United Kingdom have been slow to move, yet to introduce or finalize any legislation for stablecoins. Furthermore, they haven’t developed any clear regulatory framework for the broader cryptocurrency landscape.
Some 14 countries in total have not even initiated any stablecoin regulations whatsoever, merely scratching the surface regarding their plans or proposals to do so. Among those countries are major economic powers in Europe, including France and Germany, neither of which have taken solid enough measures regarding their own stablecoin regulatory proposals.
Elsewhere, several countries have opted to move against facilitating cryptocurrency investments and transactions. Despite being one of the largest global economies, China has prohibited the usage of cryptocurrencies, quite surprisingly joined in this peculiar stance by Qatar and Saudi Arabia in the Middle East.
Tether (USDT) Adoption is Soaring
Underpinning the need for countries to act now, whether updating existing legislature or new to cover stablecoins and other cryptocurrencies, the impressive growth of Tether now highlights its mainstream appeal in financial markets. Reports via BeInCrypto highlighted that in December 2023, Tether (USDT) reached new heights in market capitalization, breaking through the $90 billion threshold.
Now the undisputed champion of the stablecoin market, Tether commands more than 70% of the market share. Greater knowledge and acceptance has also produced vastly increased usage throughout the digital economy, making USDT one of the most popular cryptocurrencies in circulation.
Having the safety net of being tied to the US Dollar is one of the key advantages, which is perhaps why the recent PwC report is quite confounding, from the perspective of so many countries being sluggish to react. Especially considering how important the global digital economy has become for countless nations across the world.
Adding further fuel to the fire and the need for new regulatory impetus, the PwC report indicated that within discussions that surround ongoing cryptocurrency discussions, setting up guidelines for stablecoin issuances ranked lowest among the considerations for many countries. As clear evidence for the growth of Tether would suggest, given the widespread adoption and usage, that situation really needs to change quickly over the next year.