In the United Kingdom, the Financial Conduct Authority (FCA) has introduced detailed regulatory proposals for stablecoins. This move signifies a major step towards comprehensive crypto regulation, following extensive industry consultation. (Source: Benzinga, Yahoo Finance LLC, Date: Not specified)
The FCA's framework emphasizes ensuring stablecoins maintain their promised value, addressing concerns highlighted by past failures like TerraUSD's 2022 collapse, which resulted in a $60 billion market value loss. The proposals focus on asset backing transparency and custody service standards.
Proposed rules mandate clear disclosure from stablecoin issuers regarding asset backing. Firms providing crypto custody services must adhere to specific standards. The Bank of England (BOE) will separately address systemically important stablecoins, potentially allowing returns on backing assets, which could boost the commercial appeal of UK stablecoin operations.