A New Era of Regulation for Stablecoins
The United Kingdom is preparing to take a decisive step in regulating cryptocurrencies within its territory. The British government has recently released plans to regulate stablecoins backed by fiat currencies. According to a recent report, the UK Treasury plans to introduce legislation to Parliament in 2024, placing these stablecoins under the jurisdiction of the Financial Conduct Authority (FCA).
This means that stablecoins backed by fiat currencies will be subject to a set of specific rules and regulations set by the FCA.
A Regulatory Framework that Extends Beyond Stablecoins
The proposed regulatory framework is not limited to stablecoins. It also includes other areas of the crypto economy, such as algorithmic stablecoins and non-fiat-backed stablecoins. However, these will not be allowed in regulated payment chains, although they are not directly prohibited. Additionally, the FCA will have the power to require stablecoin issuers to hold all reserve funds in a legal trust.