HM Treasury of the UK Treasury Department has drawn up a plan to regulate stablecoins after TerraUSD and Terra registered a huge fall in the previous week. The aim is to bring more stability and regulation to the operations of stablecoins by creating conditions for service providers & issuers.
The announcement comes days after TerraUSD lost its peg to the US Dollar, and Terra inched closer to zero. A spokesperson from HM Treasury highlighted that the legislation would be a part of the Financial Services & Markets Bill announced by Prince Charles in the Queen’s speech.
Last week, Prince Charles delivered a speech to outline the legislative plan for the next parliamentary meeting. It perfectly aligned with the plan of the UK Government, which had expressed the intention of making the region a global crypto hub and a hospitable place for digital currencies.
Concepts covered by the government under its plan include:
- Regulating stablecoins.
- Establishing a regulatory framework for cryptocurrencies.
- Partnering with the Royal Mint to create a non-fungible token scheduled to be launched in the summer.
A spokesperson from HM Treasury stated that the measures taken by the department would ensure that new technologies are used safely in the right manner.
The British Chancellor of the exchequer, Rishi Sunak, supported the plan by highlighting its strength in bringing the financial service industry of the UK to the forefront of innovation and technology.
Updates sound inclusive; however, they would have certain restrictions on which stablecoins are included. TerraUSD has been kept on the outer side of the box as it does not guarantee stability. HM Treasury spokesperson said that the government was very clear about including only certain types of stablecoins, therefore ignoring those unsuitable for payments.
The United States of America is taking inspiration from this announcement to make a call for stablecoin regulation. The US Lawmakers have pitched in first; however, it could still be delayed a little longer.
Janet Yellen, the Treasury Secretary, believes that stablecoins are not a threat to the financial stability of the United States of America at the moment.
HM Treasury has started to keep a close eye on the broader market of cryptocurrency. The spokesperson said that the department would continue to monitor the market to remain prepared for any other regulatory action that it may have to take in the future.
TerraUSD fell in the previous week and lost its peg to the US Dollar. The entire crypto market went for a ride, and it is now looking to stabilize the ecosystem. Bitcoin is currently $29,680.90, a minor rebound from $29,522.
TerraUSD was standing at $0.1634, down by 18.44% at the time of drafting. Approximately 11.28 billion UST is in circulation with a market cap of $1,844,541,389.
