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Bitcoin price has crashed below the closely watched $20,000 per bitcoin level, down more than 70% from its all-time high late last year. Ethereum and ten other cryptocurrencies BNB
Now, after Wall Street giant Deutsche Bank issued a surprise bitcoin price forecast this week, reports have emerged that the Biden administration could pass crypto legislation regulating stablecoins like the recently collapsed TeraUSD and its backing coin Luna as early as this year.
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This week, the President’s Working Group on Financial Markets, a group that includes several financial regulators, met with an anonymous official to discuss stablecoin legislation. Coindesk The legislative package could become law by the end of the year. It defines stablecoins for the purposes of US regulation and addresses how they are used, the source said.
The stablecoin market has ballooned in recent years with the largest stablecoin Tether now having a market capitalization of nearly $70 billion. Stablecoins—cryptocurrencies pegged to traditional currencies like the US dollar—are used to facilitate payments and ease people’s access to some cryptocurrency exchanges that don’t support direct deposits.
This year, the collapse of TeraUSD, an algorithmic stablecoin that used a cryptocurrency called Luna to manage its US dollar peg, sent shockwaves through the crypto market and galvanized regulators to fine-tune the technology and protect users.
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The collapse of TerraUSD and Luna shook the confidence of many crypto investors, which was further shaken by many crypto lending companies suspending withdrawals in recent weeks amid spiraling Bitcoin, Ethereum and crypto prices.
In Europe, lawmakers this week reached agreement on tough new rules designed to ensure stablecoins maintain enough reserves to meet redemption requests in the event of a mass withdrawal.
EU lawmaker Stefan Berger said the rules would “put order in the wild west of crypto assets,” adding that the rules would “provide legal certainty for crypto-asset issuers, guarantee equal rights for service providers, and ensure high standards for consumers and investors.”