UK Treasury en route to legalizing stablecoins amid Terra's UST crash

cointelegraph.com:

United Kingdom’s Department of Treasury, or Her Majesty's Treasury, has reportedly decided to go ahead with regulating stablecoins as legal tender. While welcomed by the crypto community, the decision comes as a shocker due to its proximity to the recent fall of one of the most popular algorithmic stablecoin, TerraUSD (UST).

A local report from The Telegraph highlighted the Treasury’s intent to regulate stablecoins across Britain, which was revealed during the Queen’s Speech. During the speech, Prince Charles announced the introductions of new legislation across various sectors, including measures to drive economic growth to improve living standards in the region, adding:

Cointelegraph’s report from April 4 called attention to the U.K.’s Economic and Finance Ministry department, which cited the amendment of its existing regulatory framework for incorporating stablecoins as a means of payment.

Economic Secretary @JohnGlenUK announced today that stablecoins will be brought into UK payments regulation.This places the UK financial services sector at the forefront of technology, creating conditions for stablecoin issuers and service providers to operate and invest. pic.twitter.com/14SsIGW5bf

While the recent crash of the Terra ecosystem — which saw an unrecoverable downfall of LUNA and UST — was expected to raise red flags among the regulators, the UK Treasury maintains its course “to ensure the UK financial services industry is always at the forefront of technology and innovation,” as previously stated by the Chancellor, Rishi Sunak.

However, the Treasury’s plan does not involve legalizing algorithmic stablecoins and instead prefers 1:1 fully-backed stablecoins like Tether (USDT) or USD Coin (USDC). According to the Treasury