The UK intends to create specific regulations for stablecoins. According to the bill, digital assets with prices pegged to fiat currencies can be classified as a form of payment.
The intention to regulate some types of stablecoins was confirmed by the UK Treasury recently. In this way, the nation intends to disassociate itself from European laws related to the crypto market by creating its legislation.
The proposal has been tabled in parliament, which is expected to vote on the regulation of stablecoins soon. In addition, the Financial Services and Markets Bill will create regulations for using stablecoins.
In addition to classifying stablecoins as a form of payment, the UK will have a regulatory sandbox for developing technological initiatives related to digital assets with prices pegged to fiat currencies.
Regulation of stablecoins in Europe
Crypto assets regulation is advancing around the world. The legislative proposal put forward by the UK has similarities to the European Union’s draft bill for stablecoins.
The European Union introduced Markets in Crypto Assets (MiCA) before the UK Treasury’s announcement. MiCA proposes to regulate stablecoins and introduces daily transaction limits for the crypto asset in the market.
As such, stablecoins regulated by the MiCA can move only US$ 203.3 million per day. The movement to regulate digital assets with prices pegged to fiat currencies in Europe follows a trend of other countries considering the creation of laws for this type of crypto asset.
The movement to propose regulatory initiatives for stablecoins grew soon after the collapse of UST and Terra (LUNA) in the crypto market. With its price pegged to the dollar, the UST lost parity with the fiat currency, falling below US$ 0.01.