- EU regulators want to support the Euro CBDC after the TerraLuna crash
- The UK’s Treasury Department plans to regulate stablecoins
- The TerraLuna crash has subjected stablecoins to scrutiny
EU regulators want to support the Euro CBDC as the Treasury Department of the UK plans to formulate regulations that revolve around the stablecoin investors.
With the loss of over $16 billion of UST in just a couple of days, more regulations are expected to crop up. Regulators now see the need to enforce regulations to protect crypto investors.
The thread going around states that the TerraLuna attacker had the intention to create instability in the crypto market targeting the stablecoin market.
The EU Central Bank on CBDCs
The ECB has been working on the digital currency (digital Euro) for a couple of years. The digital euro will be used for payments by the citizens and merchants.
The ECB is also running a campaign that involves bank stakeholders, payment companies, and society. the campaign Focuses on identifying which key features are mostly preferred by these groups.
In partnership with the European Commission, EU Parliament, and ministers of Finance, the Central Bank focuses on giving the digital Euro status as legal tender.
Fabio Panetta, who is in charge of the creation of the Central Bank Digital Currency for Europe, had issued a warning against crypto assets. In his speech in Dublin on 16th May 2022, he cautioned against the vulnerability of stablecoins.
Panetta mainly focused on encouraging the adoption of the digital Euro and appreciating how public and private finance money could bring about innovation, stability, and healthy competition.
The ECB is also expected to initiate business arrangements and technical solution tests as it focuses on winding up the digital Euro development by 2023.
UK regulation has a positive stance on the crypto industry
The UK’s move will help create certainty, reliability and safety in the crypto industry which are major requirements in this industry.
A spokesman from the Queen’s treasury reported that “ legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.”
A week ago Prince Charles when delivering the Queen’s speech stated that “Plans are underway to ensure the UK’s financial service industry is always at the forefront of technology and innovation.”
The British government has plans to partner with the Royal Mint. The goal of the partnership is to create an NFT that should be minted by summer.
If this happens the UK will be among the countries that have minted an NFT by an institution that is managed by the state.
More jurisdictions looking to regulate stablecoins
With uncertainty still looming over the digital asset industry, some government agencies are planning on how to formulate regulations to protect crypto users.
Countries like China, Japan and the US are planning to introduce regulations around stablecoins.
In the US, Treasury Secretary, Janet Yellen, emphasizes Congress urging them to consent to the regulation of stable coins.
Governor to the Bank of France, Francois Villeroy de Galhau, opines that crypto assets including stablecoins need to be regulated constantly across different jurisdictions.
