UK Pledges to Regulate Stablecoins After Terra Crash – Regulating Bitcoin News

The UK Treasury has confirmed its commitment to regulating stablecoins following the collapse of terrausd (UST) and terra (LUNA). A Treasury spokesman said: “This will create conditions for issuers and service providers to operate and grow in the UK, while ensuring financial stability and high regulatory standards.”

UK regulation of stablecoins

HM Treasury is moving forward with plans to regulate stablecoins for payments despite last week’s collapse in the cryptocurrency market, The Telegraph reported on Saturday.

This must have happened after Terra crashed, causing the algorithmic stablecoin terrausd (UST) to lose its peg to the U.S. dollar, while terra (LUNA) fell to near zero.

A Treasury spokesman said:

Legislation regulating stablecoins as a means of payment will be part of the Financial Services and Markets Act announced in the Queen’s Speech.

“This will create the conditions for issuers and service providers to operate and grow in the UK, while ensuring financial stability and high regulatory standards so that these new technologies can be used reliably and safely,” the spokesperson added.

Prince Charles post Last week, the Queen delivered a speech outlining the UK government’s legislative agenda for the next parliamentary year. Two of the bills specifically mention cryptoassets.

UK government unveil A detailed plan in April aimed to make the country a global cryptocurrency hub and “crypto-hospitable place.” The plan includes establishing a dynamic crypto regulatory framework, overseeing stablecoins, and partnering with the Royal Mint to create a non-fungible token (NFT) that will be released in the summer.

Chancellor of the Exchequer Rishi Sunak said the plan would “ensure that the UK financial services industry remains at the forefront of technology and innovation”.

However, the Treasury Department does not plan to incorporate algorithmic stablecoins into legislation, saying they do not guarantee stability. Terrausd (UST) is an example of an algorithmic stablecoin.

A spokeswoman for the UK Treasury further detailed:

The government has made it clear that certain stablecoins are unsuitable for payment purposes because they share characteristics with unsecured cryptoassets.

“We will continue to monitor the broader cryptoasset market and stand ready to take further regulatory action should the need arise,” the spokesperson added.

U.S. lawmakers also Require Emergency regulation of stablecoins following Terra’s collapse last week.However, Treasury Secretary Janet Yellen believes that stablecoins are currently not a real threat for U.S. financial stability.

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Bitcoin, cryptocurrency, Crypto Regulation, cryptocurrency, cryptocurrency regulation, Luna, Queen’s speech, Stablecoin Regulation, stablecoin, the earth, tera dollar, UK stablecoin, UK stablecoin regulation

What do you think of the UK government’s commitment to regulating stablecoins? Let us know in the comments section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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