The UK Treasury Department has decided to continue to regulate staple coins as legal tender. The crypto community faced this decision with mixed feelings. This is due to the recent fall in TerraUSD (UST), one of the most popular algorithmic staple coins.
The Telegraph’s local report highlights the Treasury’s intention to regulate staple coins across the UK. This was revealed during the Queen’s speech. During the speech, Prince Charles announced the introduction of new legislation in a number of areas, including measures to stimulate economic growth to improve living standards in the region. He added:
“A bill (economic crime and business transparency) will be introduced to further strengthen the powers to combat illegal financing, reduce economic crime and help businesses grow.”
Treasury wants to regulate staplecoins with 1: 1 support
Recently, the entire Terra ecosystem also malfunctioned, the Luna and USD may have broken down and become unrepairable. It is expected to raise some red flags with the controllers. However, the Treasury is constantly monitoring to ensure that the UK financial services sector is always at the forefront of technology and innovation. The latter was mentioned earlier by President Rishi Sunak.
However, the Treasury plan algorithm did not legalize staplecoins. It prefers fully supported 1: 1 staple coins such as Tether (USDT) or USD Coin (USDC). A spokesman for the Treasury said:
“The law to regulate staple coins used as a means of payment will be part of the Financial Services and Markets Bill announced in the Queen’s speech.”
The Treasury aims to create growth opportunities by ensuring financial stability by introducing new financial technologies. Therefore, 1: 1 staplecoins are considered the right choice to contribute to this. However, the value of TerraUSD was linked to another cryptocurrency, a spokesman said:
“The government has made it clear that some staple coins are not suitable for payment purposes because they share properties with unsupported cryptocurrencies.”
The SEC is behind the UK Treasury
Hester Pierce, commissioner of the United States Securities and Exchange Commission (SEC), recently stressed the need to allow for failure when supporting the regulatory framework for staple coins. Peiris said on Twitter:
“I would be happy to talk about how to achieve the regulatory goals of the SEC without preventing much-needed testing and error for innovation.”
Beers also spoke of an interest in staplecoins among regulators in a speech to an online group. He urged the SEC to grant exceptions to certain technologies, which would allow the necessary tests to be carried out. Then she said:
“Of course this is part of trying new things, and we have to leave room for failure because our system really allows that kind of testing and error. I hope we will use it.
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