Global Watchdogs to Regulate Stablecoins Following TerraUSD (UST) Fiasco

TerraUSD (UST), Terra’s algorithmic stablecoin that crashed last week, has exacerbated chaos in crypto and accelerated plans for regulation of stablecoins markets.

Global financial regulators began to propose new legislations following the market crash. They want to better regulate stablecoins and prevent similar events from happening in the future.

The UK will legalize and regulate stablecoins

The United Kingdom Treasury announced plans to legalize stablecoins in the country over the weekend. According to The Telegraph, this new development is part of financial legislation that was mentioned in The Queen’s Speech.

A Treasury spokesperson said that legislation to regulate stablecoins will be included in the Financial Services and Markets Bill, which was made public in the Queen’s Speech. “This will create the conditions for issuers and providers to operate and expand in the UK, while ensuring financial stability and high regulatory standard so that these new technologies are safe and reliable.”

The Treasury stated that UST’s failure was a sign that not all stablecoins can be used as a reliable method of payment. They also pointed out that they are similar in volatility to cryptocurrencies.

Although the organization does not intend to add algorithmic stablecoins in the proposed legislation, the organization noted that it will continue to examine the stability of “more stable” stablecoins and take further regulatory action “if necessary.”

S. Korea Launches an Emergency Check on Crypto Trends

The country’s financial regulators launched an emergency review of trends to protect crypto asset investors in South Korea and are currently planning legislation.

The Basic Act on Digital Assets is the name of the legislation. It will include consumer protection because watchdogs want financial consumers to be aware of the risks associated with investing in virtual assets.

A local official at a crypto exchange stated:

“The most concerning thing about this incident, however, is that it can be seen as an industry failure… Domestic regulations are in effect.”

According to the report, the Korean government will adopt the Digital Asset Basic Act in 2019 after carefully considering the trends and laws governing virtual currencies in major countries. It will then implement it in 2024.

The U.S. regulators are asking all global financial regulators for cooperation in regulating stablecoins markets to avoid a repeat UST.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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