Regulators Call for Tough Supervision of Cryptocurrency
After the recent market crisis exposed flaws that might affect the price of other assets, global financial regulators are calling for stricter regulation of stablecoins.
Terra and Tether downturns highlight risks to broader markets
The Bank of England’s Deputy Governor, John Cunliffe, and the Bank for International Settlements’ Committee on Payments and Market Infrastructure have issued recommendations on the usage of stablecoins, which authorities hope will be accepted into national law around the world.
While the decline in the value of crypto assets such as Terra and Tether, in his opinion, does not represent a risk to the financial system as a whole, future occurrences may be more troublesome.
“The sell-off is a lesson for the future that underlines the rapid erosion of trust, as well as the potential volatility of stablecoins and cryptocurrencies in general,” Cunliffe wrote.
“It is critical that lessons are gained and that these rules are promptly incorporated into national legislation before stablecoins become systemic,” he added.