U.S. Treasury Secretary Janet Yellen reiterated her stance on stablecoin regulations and said it’s “highly appropriate” to have a framework ready by the end of this year, as TerraUSD (UST) loses its dollar peg.
See related article: Run on UST cuts the ground from under Terra’s feet
Fast facts
- Yellen said at a Tuesday hearing before the Senate Banking Committee that algorithmic stablecoin UST “experienced a run” and declined in value.
- “This simply illustrates that this is a rapidly growing product and there are rapidly growing risks,” Yellen added. “We really need a consistent federal framework.”
- U.S. President Joe Biden in March issued an executive order on digital assets, asking federal agencies to coordinate efforts and produce reports for regulation and policy on digital assets including stablecoins.
- Yellen added the Treasury will “issue a comprehensive report shortly.”
- The price of UST, the algorithmic stablecoin project backed by Terraform Labs PTE Ltd., fell as low as US$0.70 on Wednesday morning Asia time, according to CoinGecko data.
See related article: U.S. needs ‘to act quickly’ to regulate stablecoins, treasury secretary says