The Financial Conduct Authority or FCA, executive director of markets, Sarah Pritchard, reportedly stated that the regulator would consider recent instability in the crypto markets when establishing regulations for the industry in 2022.
Pritchard said the financial authority would “absolutely” take stablecoins like TerraUSD (UST) and Tether (USDT) depegging from the US dollar into account when crafting regulatory standards with Her Majesty’s Treasury for distribution later this year, per a Friday Bloomberg story.
Ongoing crypto instability would play a major role
While the USDT price only fell to $0.97 on May 12, the UST price has plunged by more than 93% since May 9 to more than 99%, as TheCoinRise reported. Eventually, the now-failed LUNA/UST model led to massive fear among crypto investors.
Commenting on the recent downfall, Pritchard stated:
“It really shows in front of mind the really significant issues that exist here, both in terms of a well-functioning market and obviously consumer protection. In the last week where we saw significant price movements, it brings that into the fore, and it shows the importance of making sure that people understand that that is a risk of where they put their money.”
Because stablecoins might become a popular mode of payment for retail consumers, the UK’s Economic and Finance Ministry said in April that it would strive to incorporate them into a regulatory framework on digital assets. HM Treasury also stated that it would pursue initiatives like evaluating tax policy as it relates to crypto, commissioning an NFT for the Royal Mint, and investigating distributed ledger technology (DLT) for application in UK financial markets.
Regulators in the United Kingdom, as well as the Bank of England Financial Policy Committee, indicated in March that they were reviewing crypto legislation in the region and that they “welcomed” HM Treasury’s suggestions to incorporate stablecoins into the existing framework.
In March, as TheCoinRise reported, FCA hinted at its search for crypto expertise in its incoming crypto department.
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