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UST Woes Draw Spotlight in Janet Yellen's Senate Hearing on Financial Risks

Jesse Hamilton - CoinDesk
2022-05-10 14:38
U.S. Treasury Secretary Janet Yellen focused on the ongoing distress of stablecoin UST during testimony before a U.S. Senate panel on Tuesday, just hours after the purportedly dollar-pegged token plummeted to a low of $0.65 and at least one platform halted trading.
As the Senate Banking Committee hosted a hearing on risks to the stability of the U.S. financial system, Yellen told senators that UST "experienced a run and had declined in value."
"I think that simply illustrates that this is a rapidly growing product and that there are risks to financial stability, and we need a framework that's appropriate," she said. She later said legislation to address crypto regulation would be "appropriate" this year.
Senator Pat Toomey, the panel’s ranking Republican who has been pushing legislation to establish stablecoin oversight, quickly pointed out that UST is an algorithmic stablecoin.
“That means by definition it's not backed by cash or securities, as the – if you can call them – more conventional stablecoins,” he said to Yellen. “So I think that's an important distinction."
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