The UK Treasury plans to mandate the Financial Market Infrastructure Supervisory Authority (FMI SAR) to oversee the safe return of funds in the event of a collapse of stable coins.
Her Majesty’s Treasury (the UK’s Ministry of Finance) has proposed a new set of regulatory changes for the stablocoin industry. The report highlights the importance of this type of digital asset in innovation and notes the ability to impact financial stability in the event of systemic failures.
The Treasury has proposed making the Bank of England-controlled FMI SAR the primary body to address potential systemic failure for stablcoin issuers, digital wallet providers and third-party payment systems. It is proposed to expand the organisation’s powers to oversee the timely repayment or transfer of customer funds in the event of a digital asset issuer’s bankruptcy.
The Treasury believes the Bank of England should be given greater powers to manage administrators and create rules to support FMI SARs. The Treasury argues that increased powers for FMI SARs would allow for a swift response to requests from users who have lost access to funds, as well as ensure continuity of this work.
Earlier, it was reported that the UK Treasury is developing a plan for legislative initiatives that would put the UK at the forefront of technology and innovation.