Honor to the FCA! – L’collapse of the Terra (UST) blockchain stablecoin and LUNA has pushed South Korean regulators to increase the pressure on Terra and on the exchanges of cryptocurrencies in the country. the british government also wants to use this disaster to strengthen its regulations on stablecoins.
Terra post-earthquake consultation: the Bank of England to cushion systemic shocks
The British Treasury published a consultation document on May 31, 2022. It describes strategies for “management of the failure of systemic companies of digital settlement assets (including stablecoins)”. The goal? That the Terra episode does not repeat itself.
A business or payment system is systemically important “where its failures in its design or disturbances in its operation may threaten the stability of the UK financial system”.
It also has this systemic character if its failures have “significant consequences for business or other interests”.
The institution recommends modifying the legislation in order to give the Bank of England the power to appointment of directors. The latter will oversee insolvency agreements with struggling digital settlement asset firms. The regulator would thus be able “to pursue its statutory role in matters of financial stability”.
The Treasury recalls the importance “to ensure that the existing legal frameworks” are applicable to the risk management. These risks are related to possible failures of systemic settlement asset firms.
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Stablecoin: the British financial policeman called upon after the disaster
In addition, the document proposes that the government use the existing legislative framework. The Financial Conduct Authority (FCA) would then have the capacity to regulate currencies and electronic payments.
Thanks to such a provision, the British financial watchdog should thus be able to protect consumers of theinsolvency companies behind the payment systems.
This consultation will be closed on August 2, 2022. Thereafter, Parliament will examine the information collected in due course.
Following the collapse of the Terra blockchain, the government therefore wants to take the lead in the regulation of stablecoinswhile the latter are not not Again legally recognized as a form of payment in the UK.
Terra may be rising from its ashes. In effect, the LUNA 2.0 which experiences a brief pump after the announcement of support for its airdrop by Binance. But the smoke of the crisis is far from having dissipated, with regulators who have now found a legitimate reason to beef up theframework of stablecoins.
Terra has aroused the wrath of British regulators. And you, what are you doing to prepare for the future with serenity? Start getting acquainted with this exciting world, and don’t wait any longer for yourself create an account on Binance, the benchmark Bitcoin and crypto exchange (affiliate link).