UK Affirms Commitment to Regulate Stablecoins Following Terra Meltdown – Regulation Bitcoin News

British Treasury Department reiterated its determination to regulate stablecoins following the collapse of terrausd, terra and terra. “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.

Stablecoin Regulation in the UK

The U.K. Treasury Department, HM Treasury, has begun to implement plans to regulate stablecoin payments despite the cryptocurrency market collapse last week. The Telegraph reported on Saturday.

This affirmation came after the demise of Terra. Terra (LUNA) and algorithmic stabilitycoin terrausd saw their pegs to the U.S. dollars fall.

According to a spokesperson for HM Treasury:

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 will create the conditions for issuers and service providers to operate and grow in the UK, whilst 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, outlining the British government’s legislative agenda for the next parliamentary year. Two bills specifically address crypto assets.

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

Rishi Sunak, the British chancellor of the exchequer, has said the plan will “ensure the UK financial services industry is always at the forefront of technology and innovation.”

But, Treasury doesn’t intend to include algorithmic stabilitycoins within the legislation. They aren’t guaranteed stability. An example of an algorithmic stabilitycoin is Terrausd (UST).

Further details were provided by the spokesperson for HM Treasury:

As they are similar in nature to unbacked crypto assets and stablecoins, the government is clear that these coins cannot be used for payment.

“We will continue to monitor the wider crypto asset market and stand ready to take further regulatory action if required,” the spokesperson included.

U.S. legislators also demanded the immediate regulation of stablecoins following Terra’s fall. Janet Yellen, Treasury Secretary, believes stablecoins do not pose a threat to financial stability in the United States.

What do you think about the U.K. government’s commitment to regulate stablecoins? Comment below to let us know your thoughts.

Kevin Helms

Kevin is a graduate of Austrian Economics. He discovered Bitcoin in 2011, and has been an advocate ever since. He is interested in Bitcoin security and open-source software, network effects, and the intersection of cryptography and economics.