UK Affirms Commitment to Regulate Stablecoins Following Terra Collapse

UK Reaffirms Its Commitment to Regulating Stable Coins in the wake of Terra Meltdown – Regulation Bitcoin News

The UK Treasury has confirmed its commitment to regulating stablecoins following the collapse of terrausd (UST) and terra (LUNA). “This will create the conditions for exporters and service providers to operate and grow in the UK, while ensuring financial stability and high regulatory standards,” said a spokesperson for Her Majesty’s Treasury.

UK stablecoin regulation

The UK’s Treasury, HM Treasury, is pressing ahead with plans to regulate stable payments despite the crypto market crash last week, The Telegraph reported on Saturday.

This confirmation came after the Terra crash which saw the stablecoin terrausd (UST) lose its peg to the US dollar and terra (LUNA) fell to nearly zero.

A UK Treasury spokesperson said:

Legislation regulating stablecoins, when used as a means of payment, will be part of the Financial Services and Markets Bill announced in the Queen’s speech.

“This will create the conditions for exporters 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 delivered the Queen’s Speech last week, setting out the British government’s legislative agenda for the next parliamentary year. Two of the bills presented specifically mention crypto assets.

The UK government revealed a detailed plan in April to make the country a global hub for cryptocurrency and a “crypto hospitable.” The plan includes creating a dynamic regulatory framework for cryptocurrencies, regulating stablecoins, and working with the Royal Mint to create a non-fungible token (NFT) to be issued by summer.

Rishi Sunak, Britain’s chancellor, said the scheme would “ensure that the UK’s financial services industry is always at the forefront of technology and innovation.”

However, the Treasury does not plan to include stable algorithms in the legislation, saying that it does not guarantee stability. Terrausd (UST) is an example of an arithmetic stablecoin.

A UK Treasury spokesperson clarified further details:

The government has made it clear that some stablecoins are not suitable for payment purposes because they share characteristics with unsupported crypto assets.

“We will continue to monitor the broader crypto-asset market and be prepared to take further regulatory action if necessary,” the spokesperson included.

US lawmakers also called for urgent regulation of stablecoins last week after the fall of Terra. However, Treasury Secretary Janet Yellen believes that stablecoins do not currently pose a real threat to the financial stability of the United States.

Tags in this story

Bitcoin, Crypto, Crypto Regulation, Cryptocurrency, Cryptocurrency Regulation, LUNA, Queen’s Speech, Stable Coin Regulation, Stablecoin, Terra, TerraUSD, UK Stable, 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

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

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