The British Treasury Department has affirmed its commitment to regulate stablecoins after the collapse of terrausd (UST) and terra (LUNA). “This will create the conditions for issuers and service providers to operate and grow in the U.K., whilst ensuring financial stability and high regulatory standards,” said an HM Treasury spokesperson.
Regulation of Stablecoins in the UK
HM Treasury, the U.K. treasury department, is moving forward with plans to control payment stablecoins despite a crypto market meltdown last week, The Telegraph reported Saturday.
The affirmation followed the collapse of Terra that saw algorithmic stablecoin terrausd (UST) lose its peg to the U.S. dollar and terra (LUNA) fall to close 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 can produce the conditions for issuers and repair suppliers to control and grow within the United Kingdom, while making certain money stability and high regulative standards so these new technologies may be used faithfully and safely,” the spokesperson added.
Prince Charles delivered the Queen’s Speech last week, outlining a people government’s legislative agenda for the next parliamentary year. 2 of the bills put forward specifically mention crypto assets.
The U.K. government unveiled a detailed set up in April to make the country a global crypto hub and “a hospitable place for crypto.” The set up includes establishing a dynamic regulatory framework for crypto, regulation stablecoins, and working with the Royal Mint to make a non-fungible token (NFT) to be issued by summer.
Rishi Sunak, a people chancellor of the funds, has said the set up can “ensure the united kingdom money services business is often at the forefront of technology and innovation.”
However, the Treasury doesn't decide to include algorithmic stablecoins within the legislation, locution they are doing not guarantee stability. Terrausd (UST) is associate degree example of an algorithmic stablecoin.
The HM Treasury spokesperson any detailed:
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 quality market and stand able to take any regulatory action if needed,” the advocate enclosed.
U.S. lawmakers also called for the urgent regulation of stablecoins last week following the autumn of Terra. However, Treasury Secretary Janet Yellen believes that stablecoins are presently not a true threat to U.S. financial stability.
(Kevin Helms, Bitcoin.com, 2022 )