The UST peg-breaking incident is still casting a shadow of fear and uncertainty over the global cryptocurrency market. The consumers and the financial regulators hailing from the UK are not immune from the stablecoin FUD all the same.
Recently, the government of the UK has decided to grant an extension of regulatory authority to the Central Bank to regulate the stablecoin markets.
With an increased circle of jurisdiction, the BoE officials will be able to investigate the management of the stablecoin projects that have gone out of commission. The report published by Bloomberg suggests that the trend of algorithmic stablecoins that keep crashing after a while has generated grave concerns among investors.
Additional Safety Measures for Stablecoins
It seems that the concerns of investors in the UK have started to dwindle towards extreme fear after the crash of the UST token. To address the matter and mitigate the risks for crypto investors, the government of the UK is planning to add an extra layer of regulatory scrutiny to prevent any unbearable financial damages as a result of the next stablecoin collapse.
In hindsight, the government is planning to increase the legislative and financial scrutiny for stablecoin projects by the way of BoE to curb liability in the future.
To this end, a new paper has been published by the legislative committee of UK officials that calls for an immediate amendment in the existing legislative infrastructure directed at the crypto market with emphasis on the stablecoin projects.
The government officials of the UK are not the only ones who are raising questions over the matter of stablecoin downfall. It seems that legislators in various sovereign nations are worried about raising concerns around stablecoins. With the incremented supervisory power, Central Banks like BoE will be able to investigate the stablecoin projects that failed.
At present, the bill to propose an amendment for stablecoin scrutiny is under review by the British Parliament. UST crash caused an aggregate loss of $40 billion and names like GalaxyDigital also suffered from major losses following the UST crash.
For now, the community is trying to revive Terra Chain by opting to put their bets into the Terra 2.0 rebooted blockchain.