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  /  cryptocurrency   /  Stablecoins Now Receive the Queen’s Support! But When Will They Explode?

Stablecoins Now Receive the Queen’s Support! But When Will They Explode?

The UK government is gearing up to legalize stablecoins amid volatile market conditions.

Prince Charles spoke on behalf of the Queen of England (citing health reasons) at the House of Lords last week, outlining Her government’s legislative priorities and listing the measures it intends to present to the members of the parliament. One of the emphases was on cryptocurrencies during the Queen’s annual address to the British Parliament, as the country’s cryptocurrency sector braces for significant legislation in the coming months. The UK Treasury is planning on regulating the use of stablecoins, and at a time when the entire crypto market is shocked by the declining values of stablecoins and the overall crypto market. The address comprised 38 bills that ministers anticipate will be signed into law before the start of the following year, spanning from justice and security to education, health, and infrastructure.

In January of last year, Her Majesty’s Treasury launched a consultation on the proposed UK approach to crypto-assets and stablecoins, including a proposal to bring stablecoins under the regulatory jurisdiction of the Kingdom. Despite this week’s crypto market disaster, HM Treasury moves ahead with similar ideas days after the Queen’s Speech. Last month, John Glen, Economic Secretary of the Treasury, declared in his statement that the British government would implement “a world-leading regulatory regime for stablecoins.” Treasury Chancellor Rishi Sunak stated in an interview that the government will “guarantee the UK financial services industry remains at the forefront of technology and innovation.”


The UK Government Seems Indifferent to the Chaos in the Crypto Market

This official proposal comes at a time when the cryptocurrency market is in disarray after TerraUSD, an “algorithmic” stablecoin tethered to the US dollar, plummeted below US$1 this week, triggering a massive sell-off in other cryptocurrencies. In the past week, the entire value of all cryptocurrencies fell by more than US$300 billion, and the market has reached its lowest point in almost a year. Terra’s worth was tied to a distinct coin called LUNA, and software was utilized to maintain its price. Last week, when faith in the system crumbled, its price crashed. The total value of all cryptocurrencies has dropped by about US$300 billion in the last week. As this developed, US Treasury Secretary Janet Yellen urged Congress to approve federal regulation of stablecoins. Meanwhile, a UK cryptocurrency sector representative revealed that legislation to regulate stablecoins, when used as a means of payment, will be included in the Financial Services and Markets Bill, which was unveiled in Her Majesty’s speech. The UK government has also confirmed that it will hold a consultation later this year on regulating a broader set of crypto activities, including crypto transactions using Bitcoin and Ether.