US-UK transatlantic taskforce unveils digital asset roadmap promoting stablecoin innovation

The United States and the United Kingdom are deepening cooperation on digital assets, saying regulated stablecoins have the potential to make financial systems more efficient and competitive. 

On Tuesday, the U.S Department of the Treasury and HM Treasury released a joint statement and recommendations as part of the Transatlantic Taskforce for the Markets of the Future. That group was created last year as a joint initiative to deepen cooperation and reduce market fragmentation between the two countries. 

"The United States and the UK should leverage their positions as leading global financial centers to actively shape the development of digital asset markets and next-generation financial infrastructure," the two governments said on Tuesday. 

The task force called on the Bank of England and UK Financial Conduct Authority, and the U.S. Commodity Futures Trading Commission and U.S. Securities and Exchange Commission to develop approaches for the treatment of tokenized assets. They also directed the FCA and the SEC to "explore options to facilitate cross-border capital raising."

Among the recommendations, the joint statement outlined plans to support competition and innovation in stablecoins, tokenized deposits and other similar assets, while emphasizing the need for strong standards around custody, reserve segregation and consumer protections.

"Each government endeavors to create a framework that, in the event of insolvency, bankruptcy, restructuring, or resolution proceeding, provides for stablecoin holders a clear and protected legal claim on reserves, including priority ahead of other creditors, consistent with the laws of each jurisdiction," they said in the statement. 

GENIUS Act implementation

This comes as the U.S. stablecoin bill passed into law last year turns one this week. The Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act, requires stablecoins to be fully backed by U.S. dollars or similarly liquid assets, mandates annual audits for issuers with a market capitalization of more than $50 billion, and establishes guidelines for foreign issuance. 

Federal agencies are currently working on rule proposals to implement provisions in that law. 

On Tuesday, during a House Financial Services Committee hearing, Federal Reserve Chair Kevin Warsh was asked where the central bank's progress was in adopting rules and whether it would meet a deadline on July 18.

"We're racing to put that out by this deadline," Warsh said.