American credit rating agency Fitch Ratings, Terra (Luna) with his project almost collapsed cryptocurrency made statements about the market.
Fitch: “Regulation Calls For Cryptocurrencies May Increase”
According to the organization, developments at Terra “could accelerate the calls for regulation”.
Fitch, one of the world-renowned credit rating agencies, said that the fall in the price of the UST stablecoin, which should be pegged to $1, underlined the fragile nature of stablecoins distributed by private companies.
As it is known, the LUNA token, which had a total market value of $42 billion last month, fell below $0.0035 today.
The supply of the token has increased 20 times in just four days, reaching 7.1 billion tokens. The altcoin, which had a market value of only $ 49 million at the time of this writing, is no longer even among the world’s top 300 cryptocurrencies.
Under normal circumstances, increased supply of the LUNA token should be a good sign for the UST stablecoin, but despite this, the price of UST still seems far from reaching $1.
The stablecoin, which climbed up to $ 0.83 for a short time, fell back to the level of $ 0.40.
US Treasury Secretary Janet Yellen again expressed her concerns about Terra in her statement today, saying that this coin is “a real-world example of the risks associated with stablecoins.”
Fitch said in December that algorithmic stablecoins face “untested and unique structural challenges.”
Following the fall of the UST, DAI has become the world’s largest decentralized stablecoin with a market cap of $6.2 billion. However, considering that the largest reserve of DAI is Circle’s USDC coin, it is possible to say that this coin has a partially centralized structure.
*Not investment advice.