The Treasury in the UK has published plans to regulate the stablecoin cryptocurrency scene to help protect consumers who invest in those assets. The move comes just after the collapse of TerraUSD (UST) which was supposed to remain at the same price as the dollar but ended up becoming next to worthless. The demise of UST would have seen investors lose significant amounts and now the Treasury wants to protect people who get involved in stablecoins in the future.
In its document, the Treasury said:
“Since the initial commitment to regulate certain types of stablecoins, events in cryptoasset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity and financial stability risks.”
As things stand in the UK, consumers get protection when dealing with banks, insurers, and payment companies. If you have a bank account and the bank goes bust, your savings of up to £75,000 are protected. When stablecoins are regulated, we could see something similar so savings don’t go up in smoke as happened recently with UST.
For a long time now, people have been warned that investing in cryptos is highly risky but despite this, many people continue to invest hundreds or thousands of dollars worth of money into these assets. Finally, authorities seem to be in a place where they can help protect these customers.
Via: Reuters