The G7 countries’ meeting is to address how crypto assets can be more regulated to prevent the great loss that many Terra investors suffered in its last week’s crash.
The recent collapse of the Terra ecosystem has piqued the interest of regulators all over the world! The G7 finance ministers will meet this week to discuss cryptocurrency assets on a priority basis.
On Tuesday, May 17, Reuters quoted French central bank head Francois Villeroy de Galhau as saying this. Villeroy stated at an emerging market conference in Paris:
“What happened in the recent past is a wake-up call for the urgent need for global regulation. Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably … discuss these issues among many others at the G7 meeting in Germany this week”.
Within a week, the recent collapse of the TerraUSD (UST) stablecoin wiped out billions of dollars in investor wealth. Following that, regulators around the world have been on high alert.
Regulators Warned Following Terra Collapse
South Korea has already launched a high-level investigation into the incident! Yun Chang-Hyun, a representative of South Korea’s ruling People Power Party, has also demanded that Terra founder Do Kwon be heard in parliament.
Simultaneously, regulatory bodies such as the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) will inspect local crypto exchanges. A spokesperson for the financial authorities told the local newspaper Yonhap News:
“In regards to the Luna incident, we are monitoring the overall situational changes, but there isn’t a direct measure the government can take at this moment. There is no ground for the government to intervene because coin transactions are being freely operated by the private sector.”
The Growing Demand For Stablecoin Audit
Following the events of the previous week in the crypto space, the demand for stablecoin audits has increased. There has long been a conspiracy surrounding the actual USD reserves held by the Tether (USDT) stablecoin.
Following the demise of TerraUSD (UST), market participants are demanding that all existing stablecoin providers conduct a fair audit. Ki Young Ju, CEO of CryptoQuant, recently asked whether USDT is fully backed or not. In response, Tether CTO Paolo Ardoino stated:
We redeemed 7B in 48 hours, without blinking an eye. How many other institutions can make the same claim? We have enough liquidity to handle large redemptions and pay them all one-to-one if the market wants us to. Yes, Tether is completely backed.”
