UK’s Financial Conduct Authority’s executive director of markets, Sarah Pritchard, is said to have said that when rules are drafted for the space in 2022, the regulator will consider the recent volatility of crypto markets.
Pritchard said, according to a Bloomberg report, that the financial regulator will “absolutely” take into account de-pegging stablecoins from the U.S. dollar in drafting regulatory guidelines with Her Majesty’s Treasury.
UST’s price has fallen by more than 93% since May 9 to reach about $0.06 at the time of publication, despite USDT’s brief drop to $0.97 on May 12.
“It really brings to light the significant issues here regarding a functioning market and of course consumer protection,” Pritchard said.
With the significant price movements we saw last week, it brings that to the foreground and highlights the importance of making sure people understand that there are risks associated with where they invest.
According to the United Kingdom’s Economic and Finance Ministry, stablecoins can become “a widely accepted payment method” for retail customers if included in a regulatory framework on digital assets.
As part of HM Treasury’s efforts, it plans to review tax legislation associated with crypto assets, commission a nonfungible token for the Royal Mint, and examine distributed ledger technology for use in U.K. financial markets.
HM Treasury had proposed to incorporate stablecoins into the existing framework, according to British regulators and the Bank of England Financial Policy Committee in March.
FCA has also announced it has extended the temporary registration deadline for some crypto companies beyond March 31. Copper, CEX.IO, and Revolut are among the five companies permitted to participate in crypto asset activities under this temporary status at the time of publication.