A Need for Crypto Regulation As Stablecoins Start to Crash

  • June 14, 2022
  • Jennifer Moore

In recent times, the sudden collapse in the stablecoin ecosystem of TERRA and LUNA hit like a shockwave to the crypto investors and connoisseurs. Secured by the US Dollar, these stable coins are less volatile than the other common digital assets. The huge panic around the crypto community market caused a crash of over two hundred billion dollars. All these events are pushing towards the much-awaited demand for crypto laws. Mr. Raj Chowdhury, the CEO of Paybito shares his views on the emergence of crypto regulations while keeping the crypto innovation intact. 

Why Did Stablecoins Crash?

Experts suggest that there are multiple reasons behind the failure of stablecoins. Others find the large-scale short selling by institutional investors to make a huge impact as it led to de-pegging. Within two days of its issue, TERRA coins made a 70% downfall, shaking the entire industry. 

The Basel Committee, consisting of twenty-eight financial regulators and Central Banks conducted a meeting addressing the need for crypto regulation around the world. The rules need to mitigate the risks involved in digital assets. The above risks were brought up by the committee and declared to be the main reason behind the collapse of stable coins in the industry. 

CEO Speaks

The PayBito CEO and Blockchain enthusiast Raj Chowdhury, states, “The stablecoin disaster reflects a need for proper redressal of underlying issues and adherence to a standardized framework. The domino effect can be prevented with proper regulatory steps upholding the spirit of innovation.”

With the worldwide inflation scenario, many investors consider it to be the perfect opportunity for investing in digital assets. The allocation patterns of crypto wealth are a part of the inflationary hedge designed for institutional investors that reflect on their belief in long-term cryptocurrency potential. It is important to choose the right option as the crypto market is unstable. 

Raj Chowdhury has stressed the fact that inflation is the ultimate test for cryptos and how their evolution resides upon balance and active association. He states “Global crypto adoption is evident from its market capitalization surpassing a trillion US dollars. Cryptocurrencies will inevitably play an integral part in transforming the future financial system. Stalling its growth will simply be a deterrent to progress”.

PayBito is a US-based global crypto exchange that is integrated into crypto forex technology. The trading platform of Paybito offers advanced security features, with multi-trading options. It consists of crypto lending and banking solutions. Institutional investors who are looking for crypto trading services can try PayBito’s white label solutions for portfolio management, custodial services, crypto exchange, algorithmic trading, etc. In recent times, the exchange platform is offering a flat 50% discount on all of its white-label products.

In Conclusion

Considering the collapse of stable coins causing a billion-dollar loss to the volatile crypto market, there is an emergence of crypto regulation. A law for the crypto community by keeping the innovation intact will benefit the crypto market as a whole.

Source: https://finance.yahoo.com/news/stablecoin-crash-shows-exactly-why-070000572.html

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