фото показано с : zycrypto.com

The Bank of England will help struggling stablecoins if the impact on the financial system is profound.     The government is proposing to amend a law that would bring cryptocurrencies into the purview of the apex bank. UK regulators are ramping up their efforts to exercise greater control over the nascent cryptocurrency sector.

Terra’s implosion has triggered worry in the hearts of regulators around the world after investors lost billions of dollars. However, the Bank of England wants to play a more proactive role in safeguarding investors if another stablecoin collapse threatens the stability of the financial system.

The Bank of England could exercise authority over ailing stablecoins in the UK according to a proposal by Her Majesty’s Treasury. The country’s Treasury released a proposal titled “Managing the Failure of Systemic Digital Settlement Effects” where it touted the BoE over the Financial Conduct Authority (FCA) as the body to regulate failing stablecoins.

The government intends to achieve this through the amendment of the UK’s Financial Market Infrastructure Special Administration Regime after consultations with stakeholders in the industry since 2021. One key clause that will be amended is the expansion of the meaning of the “payment system” to include cryptocurrencies to confer supervisory powers on the BoE.

The move is coming on the heels of TerraUSD’s (UST) crash that led to the collapse of the entire Terra ecosystem and plunged the markets into a full bearish sentiment. The wordings of the Treasury’s document referred to stablecoins as digital asset settlement (DSA) to incorporate “wider forms of digital assets”.

“The government also noted the need to manage risks related to the failure of a systemic stablecoin firm which either acts as a  systemic payment system or is a service provider of systemic importance,” read the 15-page report. “The failure of a systemic DSA firm could have a wide range of financial stability as well as consumer protection impacts.”

The implication of the proposal is that the apex bank would step in only in situations when there is a systemic collapse that would have a grave effect on the financial system or adversely affect business holdings. This would be in line with Part 5 of the 2009 Banking Act.

The UK has had an interesting relationship with cryptocurrencies since they made their debut over 12 years ago. In the early days, authorities adopted a laid-back approach as the industry was considered too small to have any impact on the broader financial markets.

Things quickly turned in the last 12 months following the rapid growth of the crypto industry with global market capitalization reaching highs of almost $3 trillion. The FCA struck the first blow to the industry asking firms to be fully registered with the body and took things up a notch when it issued a consumer warning on Binance saying that the company was “not permitted to undertake any regulated activity in the UK.

The country’s Advertising Standards Authority (ASA) also launched its crackdown on ads that failed to address the risks associated with cryptocurrency investments. Despite the flexing of regulatory muscles, the UK revealed its plans of being a “crypto asset technology hub” in the future.

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