TerraUSD stablecoins collapse, MAS reiterates crypto warning
Slump has fuelled concerns over larger stablecoins Tether, USD Coin and Binance Coin - which collectively have about US$150 billion in liabilities - and their ability to cover investor withdrawals
Angela Tan
STABLECOINS are proving to be not so stable after TerraUSD (UST), which is meant to keep a 1-to-1 peg with the US dollar, lost more than 70 per cent of its value in a matter of days, burning investors and leaving regulators exasperated that their warnings have fallen on deaf ears.
On Thursday (May 12), the Monetary Authority of Singapore (MAS) warned that certain cryptocurrencies are promoted as having a stable value, commonly known as “stablecoins”, but even such stablecoins have experienced fluctuations in market price. “MAS has consistently warned the public on the risk of trading in cryptocurrencies. Cryptocurrencies are highly volatile and often not anchored on economic fundamentals. This means that it is highly risky and not suitable for retail investors.”
MAS’ managing director Ravi Menon has said the central bank is reviewing an appropriate regulatory approach towards stablecoins, taking into consideration issues such as the backing for stablecoins which has an impact on their price stability.
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