Terra crash highlights stablecoin risk to financial stability: ECB
A recent ECB report says stablecoins are not practical as a mode of payment and their current form isn't fit for use in the real economy. The European Central Bank (ECB) has released a report analyzing the growth of the cryptocurrency market over the past decade and the risks it poses to the existing financial system.A section of the report dedicated to stablecoins discussed the central role that it plays in the current ecosystem. Stablecoins are increasingly used to interlink various blockchain networks and play a critical role in offering liquidity to the decentralized finance (DeFi)....
Related News
Do kwon told Laura Shin on her Unchained podcast that he is betting on the long term growth of BTC price and isn’t worried about short term volatility. Terraform Labs CEO Do Kwon has conceded that a crash in the price of Bitcoin would be “negative” for the stability of the UST stablecoin, but that he expects Bitcoin to go up.Terraform Labs is the entity behind the Terra (LUNA) blockchain platform which plans on buying a total of $3 billion in Bitcoin as a reserve for the UST stablecoin. Kwon made the comments in an interview on the Unchained podcast on Mar. 29. Host Laura Shin asked Kwon....
The Terra LUNA crash last month sent many investors back in their returns. The crypto market generally crashed the previous month, but the 80% deep dive in Terra wasn’t funny. The panic by the investors to pull out of the crypto crash intensified the fall of many coins. Generally, the crypto market suffered a loss estimated at $400 billion in a few days. Surprisingly, a new report has emerged showing that while the Whales were dumping their holdings, the retailers were busy buying up Terra. According to the Terra investor who made the report, many smaller wallets were stocking up the....
Terra's UST dropped as low as $0.29 and Tether's USDT stablecoin briefly depegged from the dollar to hit $0.96 on Wednesday. According to United States Treasury Secretary Janet Yellen, the stablecoin market is not at the scale at which the drop in the price of TerraUSD (UST) and Tether (USDT) below $1 would present a threat to the country’s financial stability.In a Thursday hearing of the House Financial Services Committee on the Financial Stability Oversight Council’s Annual Report to Congress, Yellen hinted that the stablecoin market was not yet at a size in which UST dropping to under....
Algorithmic stablecoin USDN fell to $0.90 marking the fourth time that it failed to defend its dollar peg in 2022. As the crypto community tries to navigate the bear market and recover from the onslaught brought about by stablecoin incidents like the Terra crash, another algorithmic stablecoin shows signs of struggle as it falls below its dollar peg. Algorithmic stablecoin Neutrino Dollar (USDN) has deviated from the dollar once again, marking the fourth time that USDN struggled to maintain its dollar peg this year. The Waves-backed stablecoin is trading at $0.90 at the time of writing.....
As U.S. lawmakers push for the urgent regulation of stablecoins, the Financial Stability Oversight Council (FSOC) and the Federal Reserve Board warn about the risks of stablecoin runs that threaten the country’s financial stability. Treasury Secretary Janet Yellen brought up the terrausd (UST) fiasco as an example of why a comprehensive regulatory framework is urgently needed.
Treasury Secretary Janet Yellen Testifies Before Senate Committee
Stablecoins have become a hot topic in Washington. Following Monday’s terrausd (UST) fiasco, U.S. lawmakers are calling for....