The UK's Financial Conduct Authority (FCA), the country’s financial regulator, is inviting further input on its forthcoming stablecoin regulations, announced on Wednesday.
The FCA plans to explore adding a dedicated focus on stablecoins to its innovation services, highlighting the benefits they offer to financial services and the broader economy.
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The proposed regulations aim to ensure stablecoins maintain their value and reduce the risk of failure for stablecoin and crypto custody companies. This comes after increased scrutiny from regulators following the 2022 collapse of the algorithmic stablecoin terraUSD, which led to significant investor losses.
Since 2023, the FCA has been developing its new crypto framework. It began by publishing a discussion paper outlining proposals for a stablecoin regime.
Since then, the regulator has intensified its efforts to oversee the sector, releasing several discussion papers. Meanwhile, the UK government is working to establish new legislation to make sure regulators have the necessary authority to implement these new digital asset frameworks.