The crypto-verse witnessed the dramatic downfall of Terra. The crash of its native assets, LUNA [now LUNC] and TerraUSD [UST] had an impact on the entire market. This involved, cryptocurrencies, exchanges, regulators, and not to forget investors. While several viewed stablecoins as a haven amidst the volatile market, UST changed this narrative. Now, while the community remains shaken by the crash, regulators from across the globe were seen scrutinizing stablecoins.
South Korea, in particular, has been taking significant steps to examine Terra’s demise while protecting investors. The Terra crash certainly hastened things up in the regulatory sphere as South Korea was rolling out a committee that focused solely on digital assets. This committee would reportedly assemble by the last week of June.
Formulating laws is no child’s play. Particularly not after Terra’s crash. It requires extensive research and with the changing trends, governments are forced to stay at par. Therefore, the South Korean government has decided to roll out a committee to keep a watch on the industry while it drafts laws.
As mentioned in the tweet, this South Korean committee would oversee procedures like listing, investor protection as well as disclosures.
South Korean exchanges wanted to stay clear from all things Terra. Further aiding the government’s efforts in regulating the market, five exchanges would be consulted. This list includes Bithumb, Upbit, Cobit, Gopax along with Coinone.
UK government after the infamous Terra crash
The UK government, like every other government in the world, aimed to protect its citizens against failing stablecoins. According to reports, the UK Treasury has lobbied the government to allow the Bank of England the authority to designate administrators to monitor insolvency agreements with unsuccessful stablecoin issuers.
The consultation paper put forward by the government agency is yet to get a green signal from the Parliament. However, the feedback on the consolation is scheduled for 2 August 2022.
The paper titled ‘Managing the failure of systemic digital settlement asset (including stablecoin) firms’ further read,
“Since the initial commitment to regulate certain types of stablecoins, events in crypto-asset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity, and financial stability risks.”