According to reports, the UK Treasury or the UK Treasury has decided to continue to regulate stablecoins as legal tender.While welcomed by the crypto community, the decision is shocking because it is close to The recent drop in TerraUSD, one of the most popular algorithmic stablecoins (U.S).
native Report The report from The Daily Telegraph highlighted the Treasury’s intentions to regulate stablecoins across the UK, as revealed in the Queen’s speech. In his speech, Prince Charles announced the introduction of new legislation in various areas, including measures to drive economic growth to improve living standards in the region, adding:
“A bill will be introduced to further strengthen the power to fight illicit finance, reduce economic crime and help businesses grow [Economic Crime and Corporate Transparency Bill]”
Cointelegraph’s April 4 report drew attention to the U.K. Department of the Economy and Finance, which cited revisions to its existing regulatory framework to incorporate Stablecoins as a means of payment.
economic secretary @JohnGlenUK Today announced the inclusion of stablecoins in UK payments regulation.
This puts the UK financial services industry at the forefront of technology, creating the conditions for stablecoin issuers and service providers to operate and invest. pic.twitter.com/14SsIGW5bf
— HM Treasury (@hmtreasury) April 4, 2022
And the recent collapse of the Terra ecosystem – witnessed an unrecoverable collapse Luna And the UST – expected to raise red flags among regulators, the HM Treasury will continue to “ensure that the UK financial services industry remains at the forefront of technology and innovation”, as Chancellor Rishi Sunak has previously said.
However, the Treasury’s plan does not involve legalizing algorithmic stablecoins, preferring instead a 1:1 fully backed stablecoin such as Tether (USDT) or dollar coins (USD/USD). According to a Treasury Department spokesman:
“Legislation to regulate stablecoins as a means of payment will be part of the Financial Services and Markets Act announced in the Queen’s Speech.”
By legalizing stablecoins in the UK market, the Treasury aims to open up growth opportunities while ensuring financial stability as new financial technologies are introduced. Highlighting that the value of Terra’s UST tokens is tied to a different cryptocurrency, the spokesperson said:
“The government has made it clear that certain stablecoins are not suitable for payment purposes because they share characteristics with unsecured cryptoassets.”
U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce recently emphasized the need to “leave room for failure” while supporting a regulatory framework for stablecoins.
I’d love to talk about how the SEC’s regulatory goals can be achieved without hindering the trial and error that is critical to innovation. CommissionerPeirce@sec.gov
— Hester Peirce (@HesterPeirce) May 14, 2022
Speaking at an online panel, Peirce mentioned the growing interest in stablecoins by regulators. As Cointelegraph reported, Peirce urged the SEC to provide exemptions for specific technologies, which, according to her, would allow necessary experimentation:
“We need to make room for failure because that’s obviously part of trying new things, and our framework does allow for that kind of trial and error. I hope we’ll use it for that purpose.”