The UK Confirms Their Commitment to Regulate Stablecoins
The affirmation comes just a week following the collapse of terrausd (UST) and terra (LUNA)
The British Treasury Department has confirmed its commitment to regulate stablecoins after the collapse of terrausd and terra, which saw the algorithmic stablecoin (terrausd) lose its peg to the US Dollar and terra drop to near zero. According to an HM Treasury spokesperson, “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 UK government had already unveiled a crypto plan in April, following which the country would aim to become a global crypto hub. The plan would include establishing a regulatory framework for crypto investment, regulating stablecoins and the Royal Mint creating non-fungible tokens that will be issued in the summer. According to the chancellor of the exchequer, Rishi Sunak, said the plan would potentially ensure that the UK financial service industry would be at the forefront of these innovations.
However, the plan allegedly does not include algorithmic stablecoins such as terrausd (UST) in its regulatory framework, citing their instability. Following the UK’s plan for regulation after the fall of Terra, the US’ Department of Treasury also followed suit by starting to explore their urgent regulation.