U . s . Kingdom’s Department of Treasury, or Her Majesty’s Treasury, has apparently made the decision to go forward with controlling stablecoins as legal tender. While welcomed through the crypto community, the choice may come as a shocker because of its closeness to the current fall of probably the most popular algorithmic stablecoin, TerraUSD (UST).
A nearby report in the Telegraph highlighted the Treasury’s intent to manage stablecoins across Britain, that was revealed throughout the Queen’s Speech. Throughout the speech, Prince Charles announced the introductions of recent legislation across various sectors, including measures they are driving economic growth to enhance living standards in the area, adding:
“A bill is going to be introduced toward further strengthen forces to tackle illicit finance, reduce economic crime which help companies grow [Economic Crime and company Transparency Bill]”
Cointelegraph’s report from April 4 known as focus on the U.K.’s Economic and Finance Ministry department, which reported the amendment of their existing regulatory framework for incorporating stablecoins as a way of payment.
Economic Secretary @JohnGlenUK announced today that stablecoins is going to be introduced into United kingdom payments regulation.
This places the United kingdom financial services sector the main thing on technology, creating conditions for stablecoin issuers and repair providers to function and invest. pic.twitter.com/14SsIGW5bf
— HM Treasury (@hmtreasury) April 4, 2022
As the recent crash from the Terra ecosystem — which saw an unrecoverable downfall of LUNA and UST — was likely to raise warning flags one of the regulators, the United kingdom Treasury maintains its course “to make sure the United kingdom financial services market is always the main thing on technology and innovation,” as formerly mentioned through the Chancellor, Rishi Sunak.
However, the Treasury’s plan doesn’t involve legalizing algorithmic stablecoins and rather prefers 1:1 fully-backed stablecoins like Tether (USDT) or USD Gold coin (USDC). Based on the Treasury spokesman:
“Legislation to manage stablecoins, where used as a way of payment, will participate the Financial Services and Markets Bill that was announced within the Queen’s Speech.”
By legalizing stablecoins for that United kingdom market, the Treasury aims to spread out up growth possibilities while making certain financial stability because it introduces new financial technologies. Underscoring the truth that the need for Terra’s UST token was tied to a new cryptocurrency, the spokesperson mentioned:
“The Government continues to be obvious that particular stablecoins aren’t appropriate for payment purposes because they share characteristics with unbacked crypto assets.”
Commissioner Hester Peirce from the U . s . States Registration (SEC) lately highlighted the requirement for “room in order for there to become failure” while backing a regulatory framework for stablecoins.
I’d gladly talk on how to attain the SEC’s regulatory objectives without impeding the learning from mistakes that’s so necessary to innovation. CommissionerPeirce@sec.gov
— Hester Peirce (@HesterPeirce) May 14, 2022
While speaking in an online panel, Peirce pointed out the increasing curiosity about stablecoins among regulators. As Cointelegraph reported, Peirce advised the SEC to supply exemptions to specific technologies, which based on her, allows for necessary experimentation:
“We have to allow room in order for there to become failure because that clearly belongs to trying something totally new and our framework does indeed permit that sort of learning from mistakes. Hopefully we’ll apply it that purpose.”