Summary
Drawing on their expertise in digital finance and monetary systems, Dr Marion Laboure and Dr Larisa Yarovaya highlight that consumer trust is the key barrier to the adoption of stablecoins in the UK. Survey evidence shows that stablecoin uptake remains low, both in comparison to other cryptoassets such as Bitcoin and to international peers such as Germany and the US, reflecting persistent gaps in awareness and confidence. To close this trust deficit, the authors argue that regulatory clarity, stronger consumer protections, and greater transparency are essential. They recommend mandatory segregation of client assets, independent audits, and clear disclosure of reserves to safeguard users. Building on their Stablecoin Survivability Assessment Framework, they stress that robust oversight of structural, regulatory, and market factors is critical to reducing the risk of de-pegging and supporting long-term stablecoin resilience. They endorse the FCA’s proposals on reserve composition and full backing of issuer-held coins, noting that these measures can mitigate manipulation risks and align with international standards. At the same time, they caution against recordkeeping rules that duplicate the functions of distributed ledger technology, which could stifle efficiency and innovation. Overall, they call for a proportionate and technologically neutral regulatory regime that both protects consumers and underpins confidence, while enabling the stablecoin ecosystem to grow in a secure and sustainable way.
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Authors
Dr Marion Laboure, Senior Economist at Deutsche Bank and Lecturer at Harvard UniversityÌý
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Dr Larisa Yarovaya, Associate Professor of Finance and the Director of the Centre for Digital Finance at University of Southampton Business School and Advisory Board member of the British Blockchain Association
