UK Finance Ministry Outlines New Stablecoin Regulations After Terra Crash – Coinpedia – Fintech & Cryptocurreny News Media
The brutal collapse of TerraUSd shocked the crypto world, the stablecoin Terra holding a market cap of over $18.64 billion has crashed down drastically to $700 million. In response to this, South Korean agencies have launched investigations to find the possible reason behind this massive fall. The inspection also involved the major crypto exchanges and the employees of the stablecoin Luna.
Stablecoin was standing at the 10th largest cryptocurrency before the collapse, being a crucial part of the crypto market trading, and is pegged with the dollar value, whereas trusted by the users and investors at different phases of the market.
Thus the massive collapse of TerraUSD leads to new regulations on cryptocurrency. After the crypto recovery from its major crash of TerraUSD several countries are looking forward to preventing such future crashes. The UK is one of those countries coming forward to propose such safeguards to protect stablecoins and cryptocurrency from any such future crashes.
To reduce the consumer and market integrity and financial stability risks. The Ministry of the UK further added that the insurers and established companies must comply with a set of rules, ensuring their deposit accounts, and policies can be shifted instantly to different services providers they fall into, which helps to avoid the panic among the investors.
The United Kingdom is looking forward to covering up the gap between crypto regulations, In addition, the ministry of the UK have mentioned some uncertain events in the digital assets markets that have come out of a commitment to regulate stable coin.
The UK government’s consultation paper suggests that the slump of the systematic digital settlement asset firms has affected the financial stability of the market, and hindered consumers’ monetary protection.
The UK ministry had further proposed the modification of the “Financial Market Infrastructure Special Administration Regime.” This helps to provide the Bank of England secure the community of stablecoin payments during such market crashes.