UK cryptocurrency market regulators are currently investigating Terra’s plunge. It began amid the recent cryptocurrency market massacre. The leading cryptocurrency in the market, BTC, fell as low as $26,000 during the market downturn. At the same time, Terra fell by about 100%.
Terra’s Meltdown Under Investigation as UK regulators Consider New Crypto Rules
While regulators monitor the LUNA meltdown, they’re also monitoring the crypto market. So, they can put in place new laws and regulations. Sarah Pritchard stated that they must consider the current stablecoin market volatility.
Nonetheless, the team will be hard at work in the year ending. So they can design and execute new cryptocurrency regulations. Pritchard explained that if it operates well, creativity will last. She also stated that everyone had seen the outcomes and some challenges. Over 70% of people under 40 years bought cryptos because they’re under regulation. Her remark came in the aftermath of the collapse of LUNA and UST. It’s pegged to the USD at $1.
She later added to her warning about cryptocurrency’s inherent dangers. She noted that recent price fluctuations had brought the issue to light. Also, underscored the need to ensure investors know this risk before investing.
The Treasury announced plans to audit the cryptocurrency market last month. They would release laws to create stablecoins and wallet requirements. They’re awaiting more information from the impending Market Bill and Financial Services announcement. UK authorities have planned to get new powers from the Treasury later this year. They’ll be allowing them to oversee all cryptocurrency rules.
The United Kingdom and Stablecoins
On 4th April, the Treasury revealed the stablecoin findings for last year. Alongside its stablecoin statement. There’s more consensus that stablecoins supported by one currency are bound to e-money regulations. But, not every business model could meet those criteria.
The UK Treasury plans to update the old payments law. The 2011 e-money regulations include stablecoins. It’ll guarantee businesses are FCA-registered and follow record-keeping and safety regulations. The Bank of England must regulate systematic stablecoin distributors and wallets. If a company that grants custody meets the Banking Act’s standards, it’ll be systematic. It’ll also get controlled by the FCA and BoE.
The 2013 Financial Services Act is another regulation that needs modification. The act’s concerned with markets and financial services. Regulation is ideal for any stablecoins that incorporate fiat in the UK. The government recommended not regulating algorithmic stablecoins tied to non-fiat assets.