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The FCA of the United Kingdom is seeking additional feedback on the new stablecoin regulations.
The UK financial regulatory agency (FCA) is calling for additional opinions on a new legal framework for stablecoins, in order to ensure that stablecoins maintain stable value and minimize the risk of stablecoin and cryptocurrency custodial companies going bankrupt. This is part of the FCA’s efforts to protect investors and strengthen the digital financial market following the collapse of the terraUSD algorithmic stablecoin in 2022.
The FCA plans to focus on developing innovative services related to stablecoins in the coming months, working closely with the Bank of England to establish regulations that match the operational scale of stablecoins, particularly those stablecoins that have systemic relevance. The Bank of England will also publish an additional consultation draft this year to respond to industry proposals regarding the allowance of certain returns from collateralized stablecoin assets.
The new regulations are expected to enhance transparency and stability for the stablecoin market, while also mitigating risks for users and the wider financial system in the UK.