Gate.io Blog：The Decoupling of UST Triggered a Deluge of Regulation | What is the Future of Stablecoin?
【TL; DR】1. After UST decoupling and LUNA collapse, several regulators, including the Federal Reserve, began to consider the regulation of stablecoins again.
2. At the Capitol Hill hearing, the US Treasury Secretary called for the adoption of stablecoin legislation by the end of the year to establish an appropriate framework to control the "rapid growth risk of financial stability".
3. Technically, stablecoins can be divided into three types: Off-Chain-Backed Stablecoins, On-Chain-Backed Stablecoin and Algorithmic Stablecoin.
4. The fiat-backed stablecoins and digital asset-backed stablecoins have real-world and on-chain assets as the value basis respectively, while the price of algorithmic stablecoins is driven by the supply and demand adjustment of tokens.
On May 8, UST, the fourth largest algorithmic stablecoin project, began to decouple from the US dollar. Within a few days, UST fell below 0.2 against the US dollar. The decoupling of UST triggered a crypto space storm. The value of LUNA (a UST-related token), was close to zero in just 10 days, which exacerbated the downward trend of the cryptocurrency market caused by the Fed's interest rate hike, and the price of Bitcoin once fell to $25000.
For more details, please refer to our blog post：The Decoupling of UST Triggered a Deluge of Regulation | What is the Future of Stablecoin?
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