Lawmakers in the UK appear to be accelerating efforts to address hot-button crypto issues, but how would the recent resignations impact things?
The UK is gearing up to close the regulatory vacuum present in the crypto market. The recent crash has only strengthened lawmakers’ resolve. As such, the Bank of England’s Financial Policy Committee highlighted the need for enhanced regulatory and law enforcement frameworks in the sector.
“Cryptoasset valuations have fallen sharply. The market capitalization of crypto assets has fallen to US$900 billion, from a peak of almost $3 trillion in late 2021. A number of vulnerabilities were exposed within crypto-asset markets similar to those exposed by past episodes of instability in more traditional parts of the financial system.”
The recent events in the crypto market, such as the liquidity crisis and leveraged positions being unwound, have amplified price falls. And while FPC noted that if these issues remain unattended, it could lead to the emergence of systemic risks as crypto becomes integrated with the broader financial system.
Stablecoin is one of the hot-button issues in the crypto market that the regulators are keen on establishing important provisions. The FPC has already stated that these tokens used as money-like instruments in the systemic payment chain should meet necessary standards for commercial bank money about the “stability of value, the robustness of legal claim, and the ability to redeem at par in fiat.”
UK’s top regulator – Financial Conduct Authority – said it will investigate Terra’s collapse while developing new rules for the asset class. Even though it appeared that regulations may have taken a back seat with the Russian invasion of Ukraine at the beginning of the year, the subsequent market crash and its ripple effects have forced the global watchdogs to
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