FinTech news in Janet Yellen category

While some may be hesitant about stablecoins after the UST situation, the dramatic growth in USDC speaks to the fact that the crypto market does understand what a trusted stablecoin could provide, Allaire said. For example, the two largest stablecoins by market capitalization, Tether (USDT) and USD Coin (USDC), are backed by fiat-equivalent reserves issued by centralized firms.

UST is an algorithmic stablecoin that leans on a system of traders who swap between LUNA and UST when the value of UST goes above or below its 1:1 ratio, so it could hold to the U.S. dollar. The impact of this event can have broader implications across the market, as seen earlier this week when bitcoin’s value fell below $30,000 and U.S. Treasury Secretary Janet Yellen pushed for more stablecoin regulation during an annual testimony in front of the Senate Banking Committee on May 10, right in the middle of when Terra’s algorithmic stablecoin, UST, struggled to retain its peg.