Citadel CEO Ken Griffin is arguing the collapse of Terra (LUNA) should serve as a wake-up call for regulators.
In a new interview, Griffin says the Terra (LUNA) “catastrophe,” which also saw the de-pegging of the blockchain protocol’s flagship stablecoin TerraUSD (UST), should motivate the authorities to come up with the necessary regulation, especially for stablecoins.
“I do think that the Terra catastrophe should be a wake-up call to D.C. to actually focus on thoughtful regulation. And in particular stablecoin, by virtue of its name, almost demands being appropriately regulated.”
The hedge fund CEO says that questions still surround the largest stablecoin by market cap and volumes, Tether (USDT), over the reserves backing it. According to Griffin, the evidence of the reserves backing stablecoins should be available and verifiable.
“Bloomberg’s done some phenomenal work on Tether. What’s behind Tether? The fact that we don’t know is utterly absurd.
If you’re going to represent that you have a stablecoin that’s worth a dollar you, better damn well be able to back it up with custody accounts that show you the assets that define that stability.”
The Citadel CEO says that stablecoin issuers should be required by law to disclose the reserves backing the fiat-pegged crypto assets periodically just as exchange-traded funds (ETF) are required to reveal the underlying assets regularly.
“Just as we have daily disclosures of the ETF holdings, we should have periodic disclosure of what backs the stablecoins so that people know their money is safe or not.”
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