The United Kingdom (UK) has come forward to propose auxiliary safeguards to protect the stablecoins from possible loss
United Kingdom (UK) Aims To Regulate Stablecoins
According to Reuters, the UK government has indicated that it intends to close the gap in crypto-related laws. Since the ministry’s initial commitment to oversee stablecoin, some uncertain developments in the digital asset markets have emerged, according to the ministry.
Such an occurrence necessitates appropriate regulation in order to mitigate the dangers to consumer and market integrity, as well as financial stability.
The ministry also stated that banks, insurers, and established businesses must follow the rules. This ensures that their savings accounts and insurance policies can be moved to alternative service providers as needed. This step will undoubtedly prevent investors from panicking.
The abrupt demise of TerraUSD stunned the cryptocurrency community. Terra’s stablecoin had a market valuation of more than $18.64 billion before plummeting to $700 million.
However, the South Korean agency has undertaken a number of inquiries to determine the cause of the large drop. The investigation is also looking into the involvement of various crypto exchanges, as well as the involvement of LUNA’s employees.
United Kingdom asks to amend rules to avoid crisis
Stablecoin is an integral part of the crypto market’s daily trade. Because these tokens are connected to the value of the dollar, they are trusted by investors at all stages of the market. Before its demise, the TerraUSD was the tenth largest cryptocurrency.
According to the UK government’s consultation paper, the market’s financial stability may have been harmed by the collapse of systemic digital settlement asset providers. It has also hampered the consumer’s financial security.
