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The CRS Shares a Recap of UST Stablecoins' Colossal Fall

The CRS Shares a Recap of UST Stablecoins' Colossal Fall

The US Congressional Research Agency comments on UST stablecoin and implies that it has regulatory liabilities.

The Congressional Research Service, a public policy research institute of the US Congress, has shared a recap of the current algorithmic stablecoins' situation in the crypto world and outlined several significant points.

The colossal fall of UST prices has revealed a “run-like” case where many shareholders and traders have taken out their investments at the same time, thus generating bad numbers in the statistics. So, the CRS suggests that a "run" situation occurs when investors are doubtful about the reserves backing the asset's dollar peg.

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On top of that, as the traditional financial system components such as banks and credit unions have their own regulations to avoid such “run-like” occurrences, the stablecoin industry does not implement any measures, whatsoever.

During the past few weeks, the UST stablecoin has crashed significantly and hit a new low. Now, it is estimated at $0.12 as it lost its peg to the dollar. Last year in June, The Iron Titanium (TITAN) token experienced a similar case when its value almost fell to zero in only one day.

On May 12, the CEO of Seoul-based company Terraform Labs Do Kwon suggested a plan to save UST from complete destruction. He stated that the minting capacity will be increased from almost $300M up to $1.2 billion and the base pool will be raised from 50M to 100M SDR.

Aaron S., Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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