Stablecoins became a hot topic in Washington following terrausd (UST) fiasco on Monday, when it lost its parity with the U.S. dollar, falling to its all-time low of $0.66. Today it was trading at a price as low as $0.14.
Following this crash, which resulted in a significant decline in the majority of crypto, the U.S. lawmakers began to call for the urgent regulation of stablecoins, with the Financial Stability Oversight Council (FSOC) and the Federal Reserve Board warning about the risks of stablecoin on the country’s financial stability.
U.S. Treasury Secretary Janet Yellen gave a testimony before the Senate Committee on Banking, Housing, and Urban Affairs on the Financial Stability Oversight Council (FSOC) Annual Report, mentioning the UST fiasco as an example of a “stablecoin run”, and highlighting the risks to financial stability and the urgent need of a regulatory framework that’s appropriate for these assets.