Terra Crash Sounds Regulatory Alarm, G7 Urges Global Crypto Regulations
The collapse of TerraUSD (UST) has put stablecoins in the spotlight of global regulators. According to Reuters, G7 finance ministers and central bank governors are asking the Switzerland-based Financial Stability Board (FSB) to move forward with "consistent and comprehensive global crypto regulation".
The G7 consists of the seven largest developed industrial economies - Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union.
The FSB, the Basel-based international body responsible for many of the post-2008 financial norms, had previously promised a report on global stablecoin regulation, supervision and oversight this October. FSB leader Klaas Knot has written a crypto rulebook covering financial stability and investor protection issues.
The crypto market has just experienced a major crash, by May 8TerraUSD(UST) Algorithmic stablecoin's first de-anchoring was triggered when Luna Foundation Guard, which works to support the Terra ecosystem, lent $750 million in Bitcoin and another $750 million in UST to restore anchoring as the UST stablecoin fell from its $1 price. The sell-off has put more downward pressure on BTC and may have exacerbated a broader market crash. According to CoinMarketCap, the total crypto market cap has evaporated by $320.1 billion since May 8.
This has fueled calls for regulation of stablecoins, and at a congressional hearing last week, U.S. Treasury Secretary Yellen pointed to the collapse of Terra as an example of how stablecoins "pose a risk to the financial system," but then said the industry is not yet large enough to pose a threat to financial stability.
Given the growing role of crypto in regional markets, Bank of France Governor François Villeroy de Galhau has previously urged EU officials to develop a regulatory framework, saying they only have "one or two years" to act.
In his speech at the Paris Emerging Markets Forum, Villeroy mentioned, "The recent volatility in crypto markets is a ...... for global regulators If crypto assets are not regulated, supervised and interoperable in a consistent and appropriate manner across jurisdictions, they could disrupt the international financial system."
Black technology tools
Please specify source if reproducedTerra Crash Sounds Regulatory Alarm, G7 Urges Global Crypto Regulations | Dexnav Blockchain Navigator