TerraUSD Crash: US Lawmakers Call for Urgent Regulation of Stablecoins

Updated:

Stablecoins have become the talking point on the lips of most of Washington. This comes after TerraUSD (UST) posted a debilitating crash below its $1 peg, worsening the already bearish sentiment in the cryptocurrency market.

That said, US lawmakers have called for emergency regulation of Stablecoins. Yesterday, US Treasury Secretary Janet Yellen used UST as an example for her explanation of a “Stablecoin run” in her testimony with the Senate Committee on Banking, Housing, and Urban Affairs on the Financial Stability Oversight Council (FSOC) Annual Report.

Confirming if the Treasury Secretary had any plans of regulating Stablecoins, Senator Pat Toomey (Republican-Pennsylvania) asked: “I would like to ask if you can confirm for the record here that it is still your view that it is important, I would argue even urgent, for Congress to pass legislation governing the regulations of the payment stablecoins.” Yellen responded: “Yes, I’m happy to confirm that, Senator Toomey.” Yellen added:

“The president’s working group issued a report concluding that the current statutory and regulatory frameworks don’t provide consistent and comprehensive standards for the risks of stablecoins as a new type of payment products, and urges Congress to enact legislation to ensure that stablecoins and such arrangements have a federal prudential framework.”

TerraUSD Lose $1Peg Following Bitcoin Crash

UST tumbled to the $0.20 this morning after losing its $1 peg amid one of the worst crypto market sell-offs recorded in history over the past few days. Terra Founder Do Kwon previously announced that the crypto project had amassed billions of dollars worth of Bitcoin as Stablecoin reserve. However, the recent sell-off, which saw BTC crash below the $30,000 mark, triggered fears that the Luna Foundation Guard would dump those tokens, and led to an even bigger sell-off.

USTUSD – 4-Hour Chart on FTX. Source: TradingView.

 

You can purchase Lucky Block here. Buy LBlock

  • Broker
  • Benefits
  • Min Deposit
  • Score
  • Visit Broker
  • 20% welcome bonus of upto $10,000
  • Minimum deposit $100
  • Verify your account before the bonus is credited
$100 Min Deposit
9
  • Award-winning Cryptocurrency trading platform
  • $100 minimum deposit,
  • FCA & Cysec regulated
$100 Min Deposit
9.8
  • Over 100 different financial products
  • Invest from as little as $10
  • Same-day withdrawal is possible
$100 Min Deposit
9.8
  • Award-winning Cryptocurrency trading platform
  • 14 Cryptoassets available to invest in
  • FCA & Cysec regulated
$200 Min Deposit
9.8

Highly volatile unregulated investment products. No EU investor protection.

  • Trade top Cryptos such as Bitcoin, Litecoin and Ethereum plus more
  • Zero commissions and no bank fees on transactions
  • Around the clock service with support in 14 languages
$100 Min Deposit
8.5
  • The Lowest Trading Costs
  • 50% Welcome Bonus
  • Award-winning 24 Hour Support
$200 Min Deposit
9
  • Fund Moneta Markets account with a minimum of $250
  • Opt in using the form to claim your 50% deposit bonus
$250 Min Deposit
9
Share with other traders!

Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.