At a time when a struggling pound is contributing towards inflation that is harming everyday British consumers, an ‘unhealthy dependency on US stablecoins’ is hamstringing the UK economy, according to new research.
A report by UK stablecoin issuer Poundtoken and crypto accounting firm Myna says 99% of the global stablecoin market-cap is unnecessarily tied to the US Dollar which dominates more than $143 billion of the approximate $145 billion global stablecoin market.
The US Dollar fiat market cap is currently the equivalent of 1,070,821,412 Bitcoin (BTC) – more than five times greater than the UK Pound Sterling fiat cap equating to 198,576,742 BTC.
Assuming potential proportionality between the two currencies and their fiat-stablecoin derivatives, the report suggests the UK economy could be losing as much as 20 billion pounds due to its current dependency on US stablecoins.
“As our calculations suggest, the impact on the UK economy is substantial, and what we are seeing is nine out of 10 of our clients ‘treasurying’ in US stablecoins. But we want to change this with the British-issued stablecoin GBPT to provide a viable alternative,” said Joe David, founder of Myna.
“We have some of our own employees already being paid in GBPT and offer this as an alternative payment method to our clients.
“From an accounting perspective it greatly simplifies the process by removing the need to calculate currency exchanges within day-to-day crypto accounting.”
The United Kingdom received an enormous $233 billion in raw transaction value of cryptocurrency from July 2021 to June 2022, according to an official report released at the start of this year. It is estimated that if just 10% of those transactions were in a UK stablecoin, tens of billions of pounds could come flowing back into the nation’s economy.
“We very much welcome the government’s position to make the UK a global crypto hub,” said Su Carpenter of CryptoUK.
“The proposition of a GBP stablecoin would certainly provide one opportunity for the UK to enhance our position in the digital assets space, and we support the work that poundtoken.io are doing in this space and hope that their vision to allow digital asset settlements in our local currency will provide opportunities to build on the UK’s economic proposition in this space.”
Alan Sun, CEO of Poundtoken added: “To help realise the UK’s potential as a ‘crypto hub’, policymakers should work towards integrating GBP fiat-stablecoins into British society.”