The UK Treasury will include the regulation of stablecoins as a payment mechanism in the Financial Services and Markets Act. The Telegraph writes about it.
The publication states that the decision to complete the document was sent to Queen II. He cites the words of the Treasury representative who stated that Elizabeth announced in a speech dated May 10, 2022.
In his speech, Prince Charles announced the introduction of new regulations in various sectors and measures to promote economic growth to improve living standards in the region.
“A bill will be introduced to further strengthen its powers to combat illegal financing, reduce economic crime and promote business growth,” the statement said.
The Treasury will not include algorithmic stablecoins as they do not “guarantee stability”.
“The government has made it clear that some stablecoins are not suitable for payment purposes as they share the same characteristics as fiat crypto assets. In a regulatory statement, we will continue to monitor the broader crypto-asset market and be prepared to take further regulatory action if needed.”
On May 8, the algorithmic stablecoin TerraUSD (UST) lost its pegged value against the US dollar. This happened against the background of the exit of assets from the Anchor protocol as the rate of return on deposits dropped to 17.87%.
On May 10, the asset’s quotes fell below $0.62. The decline continued on May 11, after which the LUNA cryptocurrency used to issue the UST fell to $0.3. At the time of writing, UST is trading around $0.08, while LUNA is trading at $0.0002 (CoinGecko).
On the evening of May 15, the DEI of another algorithmic stablecoin, the Deus Finance DAO project, lost its peg to the US dollar.
Earlier, the Treasury announced its plans to legalize stablecoins and issue its own NFTs. The move aims to designate the UK as a digital asset-friendly jurisdiction.
Recall that in March, the Bank of England published a framework for establishing a regulatory framework for cryptocurrencies with an emphasis on future risks to financial stability.
Source: Fork Log
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