The implosion of Terra USD this week is not only shaking the stablecoin and cryptocurrency market but also sounding alarm bells from policy makers around the world. In different parts of the planet, it is required to speed up the processing of laws to regulate the crypto industry, with the aim of obtaining legal tools that provide greater protection for users.
Some industry experts Agree that regulation of the cryptocurrency sector is necessaryespecially now when user trust is faltering.
“What happened with Terra USD is not surprising and gives a sense of urgency for Congress to act decisively and establish a national framework for licensing and oversight of stablecoin issuers.” She said During an interview with Jeremy Allaire, founder and CEO of Circle, a US dollar (USDC) stablecoin issuer.
Regulators are showing signs that they are moving in this direction, specifically those related to accelerating regulation of the cryptocurrency industry. Even US Treasury Secretary Janet Yellen said that two days ago, when referring to the Terra USD case, Warn about the need for a stablecoin regulatory frameworkas reported by CriptoNoticias.
Yellen also spoke to members of Congress on Thursday, during her appearance before the House Financial Services Committee. there, Lawmakers have repeatedly raised the issue of stablecoins sparking the collapse of Terra USD And the sudden drop in prices for the entire cryptocurrency market.
During the hearing, lawmakers raised concerns about stablecoins, reflecting that the issue has taken hold of New momentum, both in Congress and the White House to impose regulations on the industry.
The issue is not new because it has been discussed for several years, but it is It is clear that the case of Tira raised concerns and fears About the potential financial risks that can arise from the industry.
It should also be noted that last March, President Biden issued an executive order focusing exclusively on the growing sector of digital assets. Through him, he instructed federal agencies to better coordinate their work in the cryptocurrency sector.
Europe tends to limit stablecoins like Terra or Tether
As US regulators assess the risks that stablecoins pose to the global financial system, The European Commission is considering strict measures on stablecoins. Even to the point of depriving them of the idea of preventing them from replacing the euro.
A document seen by CoinDesk confirms that EU finance ministers have proposed tough measures against stablecoins.
“Under their plans, the regulators could order issuers of any stablecoin that exceeds 200 million euros ($211 million) and 1 million daily transactions, to halt operations until these numbers drop below the threshold.” Minimum”, details of the broker mentioned above.
However, the document does not reflect the official position of the Commission and appears to have been handled since Facebook announced its decision to launch its own stablecoin. Anyway, if it shows Concerns raised by this type of encryption in regulatory agencies.
As CriptoNoticias reported at the time, two years ago the Bank for International Settlements (BIS) proposed the use of dynamic and adaptive regulatory tools for the ongoing supervision of cryptocurrencies or stablecoins.
However, the Bank for International Settlements ran a classification to distinguish cryptocurrencies it called “generally stablecoins” from the so-called “global stablecoins.” In the first category Includes stablecoins like Tether (USDT), USD Coin (USDC), or DAI.
While in the second category, he referred to well-established global currencies, among them he mentioned Libra, which was later renamed Diem, and which Facebook has now abandoned.
Global cooperation to regulate the cryptocurrency market?
Regulating the cryptocurrency market is one of the top issues on the agenda of Asian regulators, according to Ashley Alder, CEO of the Hong Kong Securities and Futures Commission (SFC).
During a conversation broadcast on YouTube with Philip Middleton, President of the Official Forum for Monetary and Financial Institutions (OMFIF), Ashley Alder noted Your concerns about the lack of a global approach to regulating the cryptocurrency marketincluding non-fungible tokens and the metaverse.
The CEO of the SFC was convinced that there was a need for global legislation and therefore believed that there was a lot of work to be done in this regard, given that There are no organizations specializing in cryptocurrency.
He added that this is because government institutions have not closely followed the ecosystem, thus leaving many loopholes in identifying new assets, which do not even have a proper rating.
The South Korean government is considering institutionalizing cryptocurrency
South Korea’s new President Yoon Seok-yeol has included in his government’s plan to enact a “Digital Assets Basic Law” (DABA) for next year, as reported by the country’s media.
With this system, the new government administration Planning to incorporate cryptocurrency into the institutional sphere. Also, for the coming year, a revision of the Bank of Korea Act to issue a Central Bank Digital Currency (CBDC) is being considered.
As detailed in the note, A bill to regulate cryptocurrency is currently under discussion in the National Assembly In the country, however, the government’s plan is to “create a government proposal that reflects the direction of regulatory discussions of international organizations and major nations”.
By enacting a law in line with regulations in other countries, the South Korean government plans to create a system for effective cooperation and coordination with the Bank for International Settlements, the US Financial Stability Board and EU regulators.
The new Korean president too It has a plan to regulate the NFT market, in addition to issuing initial coin offerings (ICOs). This, despite the fact that ICOs were completely banned by the Financial Services Commission in 2018 due to the proliferation of fraudulent projects that took advantage of this funding mechanism.