The recent collapse of the Terra ecosystem has drawn the attention of regulators worldwide! Finance ministers of the G7 nations are meeting ahead this week and shall be discussing crypto assets on a priority basis.
Reuters quoted the French central bank head Francois Villeroy de Galhau saying this on Tuesday, May 17. While speaking at an emerging market conference in Paris, Villeroy said:
“What happened in the recent past is a wake-up call for the urgent need for global regulation. Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably … discuss these issues among many others at the G7 meeting in Germany this week”.
The recent collapse of TerraUSD (UST) stablecoin wiped out billions of dollars in investors’ wealth within a matter of just one week. Following it, regulators across the globe have been on a high alert.
Regulators Alert After Terra Collapse
South Korea has already initiated a high-level investigation into the matter! A South Korean politician, Yun Chang-Hyun, a representative from South Korea’s ruling People Power Party, has also demanded a parliamentary hearing of Terra founder Do Kwon.
At the same time, regulatory bodies like Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) shall be inspecting the local crypto exchanges. Speaking to local publication Yonhap News, a spokesperson for the financial authorities said:
“In regards to the Luna incident, we are monitoring the overall situational changes, but there isn’t a direct measure the government can take at this moment. There is no ground for the government to intervene because coin transactions are being freely operated by the private sector.”
Demand for Stablecoin Audit Grows
After all that transpired in the crypto space last week, the demand for stablecoin audits has grown. There’s been a long-time conspiracy going around the actual USD reserves in store for the Tether (USDT) stablecoin.
Post the TerraUSD (UST) collapse, market players are demanding that all existing stablecoin providers should conduct a fair audit. Ki Young Ju, CEO of CryptoQuant recently tweeted the same asking whether USDT is fully backed or not. Responding to it, Tether CTO Paolo Ardoino said:
“We have redeemed 7B in 48h, without the blink of an eye. How many institutions can do the same? We can keep going if the market wants, we have all the liquidity to handle big redemptions and pay all 1-to-1. Yes, Tether is fully backed”.