Sarah Pritchard, the executive director of markets UK Financial Conduct Authority, or FCA, He said that the regulator will take into account the recent volatility in the cryptocurrency markets when creating rules for the space in 2022.
According to a Friday report from Bloomberg, Pritchard said the financial regulator will “absolutely” take into account stablecoins such as TerraUSD (UST) and Tether (USDT) that are de-pegged from the US dollar in drafting regulatory guidelines with Her Majesty’s Treasury for publication later this month. this year. While the price of USDT only dipped briefly to $0.97 on May 12, UST has fallen over 93% since May 9 to roughly $0.06 at press time.
“It really brings to the fore the really significant issues that exist here, both in terms of a well-functioning market and obviously consumer protection,” Pritchard said. “In the last week, where we’ve seen significant price movements, it brings this to the forefront and shows the importance of making sure people understand that that’s a risk of where they put their money.”
The UK Treasury and Treasury announced in April that it would work to incorporate stablecoins into a regulatory framework on digital assets, as they could become “a pervasive means of payment” for retail customers. In addition, the Ministry of Finance said that it would move forward with initiatives that include the revision of the tax legislation applied to crypto assets, the commissioning of a nonfungible Token, o NFT, for the Royal Mint, and exploring distributed ledger technology for use in UK financial markets.
UK regulators, as well as the Bank of England’s Financial Policy Committee, said in March that were evaluating cryptocurrency regulations in the country, specifically noting that they “welcome” proposals from Her Majesty’s Treasury to incorporate stablecoins into the existing framework. The FCA also announced that it had extended the temporary registration status of some companies offering cryptocurrency services beyond their original deadline of March 31. At the time of writing, five companies are authorized to “carry out cryptoactive activities” under this temporary status, including Copper, CEX.IO and Revolut.
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