UK Treasury en route to legalizing stablecoins amid Terra's UST crash

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During the Queen's Speech, Prince Charles announced the instauration of a measure that would assistance tackle illicit finance, trim economical transgression and assistance businesses grow.

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UK Treasury en way   to legalizing stablecoins amid Terra's UST crash

United Kingdom’s Department of Treasury, oregon Her Majesty's Treasury, has reportedly decided to spell up with regulating stablecoins arsenic ineligible tender. While welcomed by the crypto community, the determination comes arsenic a shocker owed to its proximity to the caller autumn of 1 of the astir fashionable algorithmic stablecoin, TerraUSD (UST).

A section report from The Telegraph highlighted the Treasury’s intent to modulate stablecoins crossed Britain, which was revealed during the Queen’s Speech. During the speech, Prince Charles announced the introductions of caller authorities crossed assorted sectors, including measures to thrust economical maturation to amended surviving standards successful the region, adding:

“A measure volition beryllium brought guardant to further fortify powers to tackle illicit finance, trim economical transgression and assistance businesses turn [Economic Crime and Corporate Transparency Bill]”

Cointelegraph’s study from April 4 called attraction to the U.K.’s Economic and Finance Ministry department, which cited the amendment of its existing regulatory model for incorporating stablecoins arsenic a means of payment.

Economic Secretary @JohnGlenUK announced contiguous that stablecoins volition beryllium brought into UK payments regulation.

This places the UK fiscal services assemblage astatine the forefront of technology, creating conditions for stablecoin issuers and work providers to run and invest. pic.twitter.com/14SsIGW5bf

— HM Treasury (@hmtreasury) April 4, 2022

While the caller clang of the Terra ecosystem — which saw an unrecoverable downfall of LUNA and UST — was expected to rise reddish flags among the regulators, the UK Treasury maintains its people “to guarantee the UK fiscal services manufacture is ever astatine the forefront of exertion and innovation,” arsenic antecedently stated by the Chancellor, Rishi Sunak.

However, the Treasury’s program does not impact legalizing algorithmic stablecoins and alternatively prefers 1:1 fully-backed stablecoins similar Tether (USDT) oregon USD Coin (USDC). According to the Treasury spokesman:

“Legislation to modulate stablecoins, wherever utilized arsenic a means of payment, volition beryllium portion of the Financial Services and Markets Bill which was announced successful the Queen’s Speech.”

By legalizing stablecoins for the UK market, the Treasury aims to unfastened up maturation opportunities portion ensuring fiscal stableness arsenic it introduces caller fiscal technologies. Underscoring the information that the worth of Terra’s UST token was tied to a antithetic cryptocurrency, the spokesperson stated:

“The Government has been wide that definite stablecoins are not suitable for outgo purposes arsenic they stock characteristics with unbacked crypto assets.”

Related: SEC’s Hester Peirce says caller stablecoin regs request to let country for failure

Commissioner Hester Peirce of the United States Securities and Exchange Commission (SEC) precocious highlighted the request for “room for determination to beryllium failure” portion backing a regulatory model for stablecoins.

I'd beryllium blessed to speech astir however to execute the SEC's regulatory objectives without impeding the proceedings and mistake that is truthful indispensable to innovation. CommissionerPeirce@sec.gov

— Hester Peirce (@HesterPeirce) May 14, 2022

While speaking astatine an online panel, Peirce mentioned the rising involvement successful stablecoins among regulators. As Cointelegraph reported, Peirce urged the SEC to supply exemptions to peculiar technologies, which according to her, would let for indispensable experimentation:

“We request to let country for determination to beryllium nonaccomplishment due to the fact that that evidently is portion of trying caller things and our model truly does let for that benignant of proceedings and error. I anticipation that we volition usage it for that purpose.”

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