UK Regulators Confirmed To Regulate Stablecoins Following The Fall of LUNA & UST
UK Regulators Confirmed To Regulate Stablecoins
Despite last week’s crypto market crash, the British Treasury Department is pressing forward with plans to regulate payment stablecoins.
The confirmation came after Terra’s collapse, which saw the algorithmic stablecoin UST lose its peg to the US dollar and Terra’s token LUNA plummet to almost zero.
A HM Treasury spokesman said: “Legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.”
“This will create the conditions for issuers and service providers to operate and grow in the UK, whilst ensuring financial stability and high regulatory standards so that these new technologies can be used reliably and safely,” the spokesperson added.
Last week, Prince Charles presented the Queen’s Speech, which outlined the British government’s legislative priorities for the coming parliamentary year. Two of the proposed measures directly reference cryptocurrency.
In April, the British government published a comprehensive strategy to turn the country into a worldwide crypto powerhouse and “a hospitable place for crypto.” Establishing a dynamic regulatory framework for crypto, regulating stablecoins, and collaborating with Royal Mint to produce an NFT by summer are all part of the plan.
The plan would “ensure the UK financial services industry is always at the forefront of technology and innovation,” according to Rishi Sunak, the British chancellor of the exchequer.
The Treasury, on the other hand, says algorithmic stablecoins will not be included in the law since they do not ensure stability.
“The government has been clear that certain stablecoins are not suitable for payment purposes as they share characteristics with unbacked crypto assets. We will continue to monitor the wider crypto asset market and stand ready to take further regulatory action if required,” the spokesperson said.
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