UK’s Department of Treasury – also known as – Her Majesty’s Treasury, reportedly went forward with its plan for stablecoin regulation as a legal tender. 

Specifically, although the decision has received overall positive feedback throughout the crypto sphere, it still came across as a shocking move because of its proximity to the recent downgrade of one of the top known algorithmic stablecoin, TerraUSD (UST).

Her Majesty’s Treasury reportedly has plans down its pipeline to provide regulations for stablecoins throughout Britain, which was disclosed during the Queen’s Speech. 

In the speech, Prince Charles reportedly disclosed details regarding the releases of new legislations applicable for a vast array of industries, including methods to boost economic growth, in a bid to enhance living standards across the territory. 

“A bill will be brought forward to further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow [Economic Crime and Corporate Transparency Bill]”

While the recent fall of the Terra ecosystem – which resulted in an unrecoverable crash of LUNA and UST – was reportedly expected to be a reason for regulators to identify crypto as red flags, the UK Treasury still adopts a consistent stance “to ensure the UK financial services industry is always at the forefront of technology and innovation,” as previously stated by the Chancellor, Rishi Sunak.

Nonetheless, the plan down the Treasury’s pipeline does not come with the legalization of algorithmic stablecoins, but rather leaning towards 1:1 fully-backed stablecoins such as Tether (USDT) or USD Coin (USDC).

“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.”

With this decision of legalization for stablecoins throughout the UK market, the Treasury reportedly seeks to offer access to growth opportunities while still making sure that the sufficient level of financial stability is met, along its introduction of new financial technologies.