Tether Becomes Property in the UK – What Does This Mean for Crypto?

• The UK High Court officially ruled Tether($USDT) as personal property under national law. This follows the country's two-phase strategy of regulating crypto assets.
• Tether is the largest stablecoin in the world, with a$114.4B market cap.
• The UK seems to be future-proofing its legislative framework for crypto adoption, which many countries already do.

Slowly but steadily, crypto adoption is spreading. First, it was Bitcoin and Ethereum ETFs that took the financial market by storm.

They acted as market stabilizers but also gave traditional investors a piece of the crypto pie. And now, the UK has officially ruled that Tether ($USDT) is a property.

Tether remains the leading stablecoin, with a $114.4B market cap, followed by $USDC at $33.3B. This makes $USDT the dominant force in the stablecoin market.

Let's dig deeper into the news and see how this could impact the crypto industry.

UK Court Acknowledges $USDT as Personal Property

After yesterday's government bill underlined the intention to make NFTs, crypto, and carbon credits personal property in the UK, the High Court took action. They likely acted this fast because they wanted to define the regulations sooner, and get the crypto framework in line.

The judge said that $USDT was rather a distinct form of property not premised on an underlying legal right,' and that it can become the subject of tracing and can constitute trust property in the same way as other property.'

The decision came on the back of a 2019 judgment that acknowledged the same thing and the England and Wales Law Commission's position in a 2023 digital assets report.

English law governs approximately 250B in global acquisitions and mergers, with 40% in global corporate arbitrations. Adapting the law to incorporate crypto assets is a step forward in ensuring the UK's international financial stability.

Justice Minister Heidi Alexander also explained the necessity of remaining up-to-date with the latest advances in crypto technology.

It is essential that the law keeps pace with evolving technologies and this legislation will mean that the sector can maintain its position as a global leader in cryptoassets and bring clarity to complex property cases.Heidi Alexander, UK Justice MinisterTwo-Phased Approach To Adopting Crypto in the UK

In April 2022, the UK Treasury published a clear strategy for regulating crypto assets and stablecoins. Theadoption would take place in two phases:

1. Regulatory framework for stablecoins as a payment method

The government would need to amend the Electronic Money Regulations (2011) and Payment Services Regulations (2017) tointroduce fiat-backed stablecoin payment methods.

1. Expand the framework beyond stablecoins

This includes the issuance and custody of crypto assets and the operation of a crypto exchange. Unlike the EU MiCAR, the UK framework will not cover services offering advice on crypto assets and portfolio management services.

It seems Phase 1 is currently underway, with $USDT accepted as a form of property under UK law. The country is taking significant steps to regulate the use of crypto.

However, unlike other countries, the UK chose to regulate crypto by targeting specific amendments in existing financial regulations. This should lead to a more focused legal acceptance of crypto-related activities.

Why Tether?

Why did the UK begin with Tether in its national crypto acceptance initiative? Easy - $USDT is the largest stablecoin, with a $114.4B market cap (245% higher than the second-largest stablecoin, $USDC).

Source: CoinGecko

$USDT sits at 70% dominance and it only seems to grow over the years. It's not a surprise, then, that the UK chose to begin with Tether.

Recently, Tether invested $100M in Adecoagro, an important Latin American agricultural company, buying a 9.8% stake in it. This is part of Tether's initiative to invest in other avenues besides crypto.

The company has already staked a claim in several sectors, including Bitcoin mining, green energy, education, and artificial intelligence.

Looking Ahead - The UK Is Future-Proofing Its Law

Crypto is here to stay, in one shape or another. It might not be Bitcoin, Tether, or... World Liberty Financial, but the future is crypto.

It looks like the UK understands that and is future-proofing its legislation to account for that (similar to other countries). Will this help the UK stabilize its foothold in the crypto community and DeFi? It remains to be seen.

ReferencesClick to expand and view references

• UK High Court Judgment on Tether (Media Bank)
• New bill introduced in Parliament to clarify crypto's legal status (UK Government)
• State of Stablecoins: 2024 (CoinGecko)
• Tether Invests $100M in Adecoagro, Securing 9.8% Stake in Agricultural Giant (CoinMarketCap)
• Cryptocurrency Regulation Tracker (Atlantic Council)

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