Originally Posted by
mr noble
Well I’ll be darned. Amazing.
The B of E wants to make the UK a crypto hub and is offering to bail out stablecoins if necessary.
I had to check it wasn’t published on April 1st.
Same story is on many media outlets (if you hit a firewall)
https://www.ft.com/content/4c408bef-...0-08ab3393b860
Wut?
Have you read the article?
The UK Treasury is proposing an insolvency regime to manage the failure of major crypto stablecoins after the collapse of terra earlier this month sent shockwaves through the global crypto market." The Bank of England would take the lead in managing the collapse of a stablecoin that had systemic importance to the financial system under a plan the Treasury proposed in a consultation published on Tuesday.
Where does it say bail out?
This is in fact a major threat to USDT, as the BOE will enforce regulation:
“Events in cryptoasset markets have further highlighted the need for appropriate regulation to help mitigate consumer, market integrity and financial stability risks,” the Treasury said on Tuesday. The potential risks have also been magnified since most stablecoins operate without the type of oversight that would be standard, either among banks or other systemically important financial institutions. In the wake of the 2008 financial crisis, UK regulators began requiring banks deemed “too big to fail” to produce living wills, which provide a roadmap of how to safely wind down their businesses if they fall into a distressed situation. Lenders are also required to maintain certain levels of reserves and meet measures of balance sheet strength to prevent potentially catastrophic bank “runs”.
The moment tether has to provide transparency about their levels of reserve, it is game over.