The British government wants to address the risks of, among other things, stable currencies. That is not surprising, given the chaos that has caused the stable currency of Terra (UST). An document issued by the United Kingdom Treasury Department establishes that the existing “regulatory regimes” can be applied to non -regulated digital payment instruments.
Risk management
In the new document, published on Tuesday, the Ministry proposed to use the existing regulatory regimes to mitigate the risks posed by stable currencies and other cryptocurrencies. The document began with a positive note. That is, reiterating the commitment of the United Kingdom government with cryptoinnovation. In addition, it also stressed that stable currencies must be recognized by law.
While the collapse of the UST probably played an important role in the creation of this document, it is not mentioned anywhere. Terra and the moon that accompanies it are also omitted from this plan. The Ministry does speak in the document to “manage the risks associated with the bankruptcy of a stable currency company of systemic importance.” This is very similar to you.
“Events in cryptoactive markets have further highlighted the need for adequate regulation to help mitigate the risks for consumers, market integrity and financial stability.”
What are these so -called ‘regulatory regimes’?
These rules are known in the United Kingdom as special administration regimes (SAR). These SARs would provide the Bank of England for regulatory supervision on organisms that issue stable currencies. In that case, they can check if the system of these stablcoins is stagnant. These SARs would also guarantee that companies always work on the best interest of their customers (and the rest of the population).
The document describes two different SARs that can be applied to stable currencies, but a final decision will not be made until later. The file asks for feedback, with a deadline on August 2. There is already a preference: the Special Regime of Infrastructure Administration (IMF SAR). It would be appropriate to address the bankruptcy risks of this type of companies.