UK PROPOSES WAYS TO MANAGE FAILING STABLECOINS

Wed 01 June 2022:

On Tuesday, the United Kingdom announced plans to handle failing stable coins in cryptocurrency exchanges and reduce instability threats.

“The government has made a firm commitment to place the UK’s financial services sector at the forefront of crypto asset technology and innovation,” Her Majesty’s Treasury wrote in a consultation report.

“It is taking a staged and proportionate approach to crypto asset regulation, which is sensitive to risks posed and responsive to new developments in the market. This approach will focus on stable coins in the first instance given their potential to develop into a widespread means of payment,” it added.

The move comes after controversial stablecoin, TerraUSD, known as UST, which was initially designed to be pegged one-to-one to the dollar, saw its price plummet to almost $0 in recent weeks.

Prosecutors in South Korea have summoned all Terraform Labs personnel to investigate the price fall of UST, its brother Luna Classic, and the new Terra 2.0 form.

The United Kingdom emphasized that it wants to make sure that current legal frameworks can be used effectively to control the risks posed by the failure of systemic digital settlement asset enterprises.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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