The US Treasury Secretary is concerned about the UST stablecoin fiasco

US Treasury Secretary Janet Yellen has once again called for increased control over stablecoins against the background of the deviation of the UST algorithmic token from the reference rate.

Responding to a question from Senator Pat Toomey about the regulation of stablecoins during today's hearing, Yellen said that this is an "important, even urgent" task for Congress. According to her, it would be "extremely appropriate" to approve the relevant legislation by the end of this year.

"The stablecoin, known as TerraUSD, experienced a massive withdrawal of assets and decreased in price. I think this confirms that we are dealing with a rapidly growing product, which is characterized by rapidly growing risks," she said.

Toomey, who promotes the regulation of stablecoins with real collateral, such as Tether, drew the attention of the Minister of Finance to the fact that it is important to distinguish them from algorithmic ones, like UST.

Cardano founder Charles Hoskinson, in turn, did not miss the opportunity to make a retaliatory attack towards the CEO of Terraform Labs, the company behind UST, Do Kwon. In April, Kwon wrote that they should add ADA to UST reserves "for negative correlation," hinting that the Cardano token is not growing when the whole market is doing it.

"Should I buy LUNA for negative correlation?" asked Hoskinson, mentioning the UST–related token, the rate of which dropped by more than 50% in a day.