UK to develop new crypto regulation rules following Terra collapse

The agency believes that the recent situation in the stablecoins market should be taken into account when drafting regulations for the digital assets market

20.05.2022 - 14:10

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What’s new? The UK’s Financial Conduct Authority (FCA) intends to take into account the situation with the collapse of the Terra ecosystem when drafting new crypto regulations jointly with the Treasury. This was reported by the FCA’s executive director for markets Sarah Pritchard to Bloomberg.

Bloomberg’s material

What events happened before? On March 31, the FCA canceled temporary registration for cryptocurrency companies. Operating without authorization is now a criminal offense.

On April 4, the UK Treasury Department said that with proper regulation stablecoins would be recognized as a valid form of payment. It is also claimed that they could become a more efficient means of payment and widen consumer choice.

The US Securities and Exchange Commission (SEC) may tighten regulation of stablecoins following the collapse of the UST rate and the temporary loss of the Tether (USDT) peg to the dollar. According to Commissioner Hester Peirce, the regulator has the ability to include in its powers the development of rules for digital currencies and the platforms on which they are traded. In this, she noted the potential for stablecoins to be used in market-based systems.

In late May, G7 countries called to accelerate the “development and implementation of consistent and comprehensive regulation” of cryptocurrencies following the collapse of the Terra (LUNA) ecosystem. The G7 appealed to the Financial Stability Board (FSB), which is responsible for drafting the document.

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