UK financial regulator to investigate Terra collapse as part of new crypto rules

What

The UK’s financial regulator and its finance ministry, the Treasury will consider the collapse of the Terra ecosystem’s crypto tokens while creating new rules for crypto assets

Why 

In an interview with the Bloomberg, the FCA’s executive director confirmed that recent market instability in stablecoins will need to be taken into account when working with the Treasury to create new rules

What next

The UK will continue to work on a new crypto regulatory package and plans to create the rules later this year

The story

The Financial Conduct Authority, the UK’s financial regulator has confirmed that the recent collapse of the Terra ecosystem’s crypto tokens will be taken into account as its works with the Treasury to establish new regulations surrounding stablecoins.

As part of these new rules, Sarah Pritchard, the FCA’s executive director for markets told Bloomberg that the recent market instability surrounding stablecoins “will absolutely need to be taken into account.”

The FCA plans to work with the Treasury to create the new rules later this year. In March during a consultation on its approach to crypto regulation, the government proposed that algorithmic stablecoins should not be regulated.

To learn more about stablecoins, visit our learning resource here.