The UK Treasury Department has reiterated its commitment to regulate stablecoins following the recent collapse of TerraUSD (UST) and Terra (LUNA). 

According to an HM Treasury spokesperson: “This will create the conditions for issuers and service providers to operate and grow in the UK, whilst ensuring financial stability and high regulatory standards so that these new technologies can be used reliably and safely.”

HM Treasury is advancing with plans to implement regulations for payment stablecoins, despite the crypto market meltdown last week, The Telegraph reports. This followed Terra’s collapse, which led to the TerraUSD stablecoin to lose its peg to the Dollar, and Terra (LUNA) to drop close to zero. 

The Treasury spokesperson added: “Legislation to regulate stablecoins, where used as a means of payment, will be part of the Financial Services and Markets Bill which was announced in the Queen’s Speech.”

Last week Prince Charles delivered the Queen’s Speech, setting out the government’s legislative agenda for the upcoming parliamentary year. Two of the bills presented are specifically regarding crypto assets, reports Bitcoin.com.

In April, the British government revealed plans to make the UK a global crypto hub and “a hospitable place for crypto.” The plans include regulating stablecoins, setting up a dynamic regulatory framework for cryptocurrencies and the creation of an NFT (non-fungible token) to be issued by summer.

The government also confirmed it will hold a consultation later in the year on the regulation of a broader set of crypto activities, including crypto trading using Bitcoin and Ether.

Chancellor of the exchequer, Rishi Sunak said the plans will “ensure the UK financial services industry is always at the forefront of technology and innovation.”