Stablecoins’ recent de-pegging is not a ‘real threat to financial stability,’ says Janet Yellen

Bybit
Stablecoins' recent de-pegging is not a 'real threat to financial stability,' says Janet Yellen
fiverr


According to U.S. Treasury Secretary Janet Yellen, the stablecoin market has not yet reached the scale where TerraUSD (UST) and Tether (USDT) prices falling below $1 would pose a threat to the country’s financial stability.

During Thursday’s House Financial Services Committee hearing on the Financial Stability Oversight Committee’s annual report to Congress, Yellen hinted that the stablecoin market has not yet reached the size of the UST drop below $0.40 and USDT (the largest stablecoin by market capitalization). coins) size. A brief de-pegging from the dollar to $0.96 would be “a real threat to financial stability.” Citing a November report from the President’s Working Group on Financial Markets, the Treasury secretary said the committee is currently analyzing “potential financial stability risks” in the digital asset space.

“They are growing very rapidly,” Yellen said of digital assets. “They pose the same risks associated with bank runs that we’ve known for centuries.”

U.S. Treasury Secretary Janet Yellen addresses members of the House Financial Services Committee on Thursday

Yellen added that a U.S. central bank digital currency could have “a very significant impact on the structure of financial intermediation,” although it may be less risky than stablecoins. Her remarks came after the Treasury secretary addressed the Senate Banking Committee at a hearing on Tuesday, when she called on lawmakers to develop a “coherent federal framework” for stablecoins to address risks.

Binance

Related: Yellen Says Cryptocurrencies Have Not Been Used to Evade Major Russia Sanctions So Far

UST was pegged to the U.S. dollar until Monday’s massive sell-off triggered extreme price volatility in Terra (LUNA) and many major cryptocurrencies including Bitcoin (BTC) and Ethereum (ETH). The stablecoin fell about 70 percent to $0.29 on Wednesday, still de-pegged from the dollar at $0.37 at the time of publication. In contrast, USDT de-pegged for about 12 hours from Wednesday before returning to $1.00.

Validators on the Terra blockchain officially ceased network activity on Thursday in an effort to prevent a governance attack following the devaluation of LUNA, Cointelegraph reported. Binance also delisted its LUNA/USDT contract after the price fell below 0.005.



Source link

BTCC

Be the first to comment

Leave a Reply

Your email address will not be published.


*