Regulators have the authority to act now to stop runs on risky stablecoins
Last week, crypto investors learned just how dangerous stablecoins can be. TerraUSD (UST) USTUSD, 14.52% —until recently the third-largest stablecoin by market capitalization—plunged more than 87% in value to $0.12 as of Monday afternoon, causing more than $16 billion in losses to UST holders and sending ripple effects across the crypto market.
Observers and scholars have long warned of the unique risks posed by stablecoins—while promising that they can always be exchanged one-to-one for actual U.S. dollars BUXX, 0.47%, stablecoins can run.
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