The executive director of markets at the UK’s Financial Conduct Authority, Sarah Pritchard, reportedly said that when rules are written for the space in 2022, the regulator will take recent volatility in crypto markets into account.
Pritchard said, according to a Bloomberg report, that the financial regulator will “absolutely” take into account the detachment of stablecoins from the US dollar when drafting regulatory guidelines with Her Majesty’s Treasury.
The price of UST has fallen over 93% since May 9 to around $0.06 at press time, despite USDT’s brief decline to $0.97 on May 12.
“It really highlights the important issues here around a functioning market and of course consumer protection,” said Prichard.
With the significant price movements we’ve seen in the past week, this brings this to the fore and highlights the importance of making sure people understand that there are risks associated with where they invest.
According to the UK’s Department of Economics and Finance, stablecoins can become “a widely accepted method of payment” for retail customers if included in a digital asset regulatory framework.
As part of HM Treasury’s efforts, it plans to review tax legislation associated with crypto assets, order a non-fungible token for the Royal Mint, and examine distributed ledger technology for use in UK financial markets.
HM Treasury had proposed incorporating stablecoins into the existing framework, according to UK regulators and the Bank of England’s Financial Policy Committee in March.
The FCA also announced that it has extended the deadline for temporary registration of certain crypto companies beyond March 31. Copper, CEX.IO and Revolut are among the five companies authorized to participate in crypto-asset activities under this temporary status at the time of publication.