News

$UST Decline: Here’s U.S. Government’s Quick Response

Published by
$UST Decline: Here’s U.S. Government’s Quick Response

The UST stablecoin’s dramatic decline in value featured in U.S. Treasury Secretary Janet Yellen’s testimony before the committee on banking, housing, and urban affairs, U.S. Senate, on Tuesday. Yellen stated that the stablecoin’s turbulence clearly illustrates risks associated with crypto assets to financial stability, adding that the treasury department would soon issue a comprehensive report that outlines hazards posed by the cryptocurrency industry. “Increased and coordinated regulatory attention is necessary,” she explained.

Advertisement

New Crypto framework in 2022

This gains prominence as the statement comes within hours after the UST stablecoin de-pegged with the U.S. Dollar amid a bloodbath in the cryptocurrency market.

She said there was a need for an appropriate framework as soon as this year. “With respect to digital assets, new products and technologies may present opportunities to promote innovation and increase efficiencies. However, digital assets may pose risks to the financial system, and increased and coordinated regulatory attention is necessary.”

Advertisement

Stablecoins Within Federal Framework

In line with President Biden’s executive order calling for a comprehensive approach to digital asset policy, the Financial Stability Oversight Council is drafting a report that will identify financial stability risks and regulatory gaps, the U.S. Treasury Secretary said in her testimony. She also expressed interest in working closely with the committee “to ensure that payment stablecoins and their arrangements are subject to a federal prudential framework on a consistent and comprehensive basis.”

UST’s price dropped to a low of $0.60 and de-pegging by a staggering 40% from the U.S. Dollar, in a potentially permanent dent to investors’ trust on its stability. Following this, crypto exchange Binance announced temporarily suspension of the withdrawal of LUNA and the UST stablecoin citing high volume of pending withdrawal transactions.

As of writing, UST is trading at $0.908038 as opposed to a 24 hour low of $0.6841.

Advertisement
Share
Anvesh Reddy

Anvesh reports major crypto updates around U.S. regulation and market moving trends. Published over 1400 articles so far on crypto and blockchain. A proud dropout of University of Massachusetts, Lowell. Can be reached at anvesh@coingape.com or x.com/BitcoinReddy or linkedin.com/in/anveshreddybtc/

Published by
Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Recent Posts

  • Altcoin News

XRP News: Key Ripple Whale Indicator Turns Bullish After 4 Months, Price Rally Ahead?

In a major XRP news today, a key whale indicator turns bullish for Ripple's native…

October 30, 2025
  • News

Pi Network Dedicates 350,000 Active Nodes for AI With OpenMind Partnership

In the latest development, the Pi Network Ventures announced its investment in artificial intelligence (AI)…

October 30, 2025
  • News

Breaking: Trump Cuts Tariffs as US-China Reaches 1-Year Trade Deal, Bitcoin Rebounds

US President Donald Trump reduced tariffs on China after a meeting with President Xi Jinping,…

October 30, 2025
  • News

Binance Responds to Charges of Supporting Trump-Family Crypto USD1 and WLFI Soon After CZ Pardon

US lawmakers have started accusing crypto exchange Binance of supporting Trump family projects like World…

October 30, 2025
  • Bitcoin News

SpaceX Makes Third Huge Bitcoin Transfer in 10 Days, Is Elon Musk Planning Something Big?

Elon Musk’s space exploration company, SpaceX, moved another 281 Bitcoin on Thursday, according to blockchain…

October 30, 2025
  • News

Crypto Market Tumbles as Jerome Powell Says December Rate Cut ‘Far From Certain’

The crypto market turned sharply lower on Tuesday after Federal Reserve Chair Jerome Powell said…

October 30, 2025