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The UK Financial Conduct Authority (FCA) needs to “take into account” recent volatility in the cryptocurrency market as it works on the regulatory framework for the industry. This
The UK Financial Conduct Authority (FCA) needs to “take into account” recent volatility in the cryptocurrency market as it works on the regulatory framework for the industry. This was stated by Sarah Pritchard, the division’s general manager, in an interview with Bloomberg.
He also cited a survey published by the FCA, which found that 69% of respondents who invested in digital assets under the age of 40 mistakenly believed they were issued by the British government.
“This really shows that there are some really important issues here, both in terms of a well-functioning market and, frankly, consumer protection,” Pritchard said. Said.
The FCA representative stressed that people should understand the risks of such investments. According to him, the Treasury and financial regulator will scrutinize the collapse of the Terra ecosystem.
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 prices fell below $0.62. The decline continued on May 11, after which the LUNA cryptocurrency used to issue the UST fell to $0.3.
On the evening of May 15, the DEI of another algorithmic stablecoin, the Deus Finance DAO project, lost its peg to the US dollar.
The market reacted bearish to the collapse of the UST. On Thursday, May 12, the bitcoin price dropped to $26,700, which is comparable to the end-of-2020 level. At the time of writing, the first cryptocurrency is trading at around $28,780 (Binance).
Earlier, the Bank of England published a framework for establishing a regulatory framework for cryptocurrencies focused on future risks to financial stability.
In April, the British Treasury announced plans to legalize stablecoins and issue its own NFTs. This move aims to establish the country as a digital asset-friendly jurisdiction.
Recall that the UK Treasury refused to legalize algorithmic stablecoins because they “do not guarantee stability”.
Source: Fork Log
I’m Sandra Torres, a passionate journalist and content creator. My specialty lies in covering the latest gadgets, trends and tech news for Div Bracket. With over 5 years of experience as a professional writer, I have built up an impressive portfolio of published works that showcase my expertise in this field.
