Crypto lobbyists working to mitigate the consequences from the stablecoin crisis

After the implosion of the stablecoin, TerraUSD, and the losses of billions of dollars in the industry, leaders from the crypto sector are attempting to ease legislators’ fears about the future of stablecoins in Washington.

Crypto lobbyists working to mitigate the consequences from the stablecoin crisis

Following the collapse of TerraUSD, which knocked billions off the cryptocurrency market, the cryptocurrency industry is scurrying to react to US legislators’ worries about stablecoins.

The Blockchain Association and the Chamber of Digital Commerce, who represent some of the most powerful crypto businesses, claim they have been getting a barrage of queries from Congress since TerraUSD, also known as UST, broke its peg last week and collapsed 90%.

Last week, the cryptocurrency lost parity with the dollar and fell around 90%, bringing the rest of the cryptocurrencies down with it and raising concerns among US authorities and Congress. Tether and USDC lead the $163 billion stablecoin market. Other stablecoins, such as UST, have managed to gain a large portion of the cryptocurrency market in the United States and elsewhere.

Legislators on Capitol Hill have been questioning lobbyists about the construction of UST in order to establish if the collapse was avoidable and whether other cryptocurrencies may face the same fate. Lobbyists are pushing politicians not to take too harsh a stance against stablecoins.

The growing crypto turmoil also worries the White House. Last week, US Treasury Secretary Janet Yellen told a Committee hearing that Terra’s failure demonstrates that virtual currencies may pose threats to the financial system, and that stronger and coordinated regulatory attention is required. Because of the increased scrutiny of politicians and the worries raised by the bitcoin meltdown, the crypto sector has been strengthening its influence in Washington by deploying substantial resources since 2021.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Jai Hamid

CoinCu News