sunny.png
Wednesday July 6th, 2022 7:00PM

Crypto meltdown prompts Yellen to call for new regulation

By The Associated Press
Related Articles
  Contact Editor

WASHINGTON (AP) — Treasury Secretary Janet Yellen, responding to the recent sharp decline in the value of cryptocurrencies, said Thursday that additional federal regulation was needed to respond to the wave of speculative investment in the currency whose secrecy is an essential part of its appeal.

“We really need a regulatory framework to guard against the risks,” Yellen said of cryptocurrencies called stable coins, during a House committee hearing Thursday. Citing the rapid rise in use of digital assets, she added, "Really, we need a comprehensive framework so that there are no gaps in the regulation."

Stable coins are a type of cryptocurrency pegged to a specific value, usually the dollar, another currency or gold. Its parity with the dollar is what, in theory, makes it stable. However, volatility in the cryptocurrency market this week challenged that premise.

“We’ve had a real life demonstration of the risks," she said, referring to the meltdown of the TerraUSD beginning on Monday.

A run — or sale by a large number of owners — on the Terra stable coin, caused it to drop in value from roughly $8 to below 30 cents.

A Federal Reserve report released Monday outlines how stable coins are vulnerable to runs.

“Terra broke the buck and this morning and yesterday the largest stable coin Tether also broke the buck,” referring to another token that dropped below its dollar peg this week.

Yellen was also questioned at the hearing on the root cause of inflation, which has driven up prices, and how the administration plans to combat rising energy, housing and food costs.

She said the administration is doing what it can to address supply chain issues and other contributors to inflation.

“We have a really good strong labor market, we have household balance sheets that are in good shape,” as well as a strong banking sector, Yellen said.

“All of those things suggest that the Fed has a path to bring down inflation without causing a recession,” she said.

  • Associated Categories: Associated Press (AP), AP Online Headlines - Washington, AP Business, AP Business - Economy
© Copyright 2022 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Managers fired from Twitter amid Musk buyout turmoil
In the latest sign of turmoil inside Twitter amid Elon Musk's planned buyout of the company, a Twitter general manager, Kayvon Beykpour, is leaving after 7 years
3:41PM ( 4 minutes ago )
California lawmakers raise awards for malpractice lawsuits
The California Legislature has voted to increase how much money people can win in medical malpractice lawsuits
3:39PM ( 7 minutes ago )
Senate confirms Powell for 2nd term as Fed fights inflation
The Senate on Thursday confirmed Jerome Powell for a second four-year term as Federal Reserve chair, giving bipartisan backing to Powell’s high-stakes efforts to curb the highest inflation in four decades
3:38PM ( 7 minutes ago )
Associated Press (AP)
Live updates | Russian troops seek to block Kyiv’s forces
Ukrainian ministry officials say that Russian troops are trying to block Kyiv’s forces from advancing as far as the Ukrainian-Russian border in the northeastern Kharkiv region
3:05PM ( 40 minutes ago )
Louisiana state troopers charged in beating of Black man
Three Louisiana State Police troopers have been charged with simple battery, accused of beating a Black motorist after a chase
2:45PM ( 1 hour ago )
Live updates | At least 3 dead in Russian strike in Ukraine
Ukrainian military officials say that at least three people died following a Russian airstrike on a city in Ukraine’s northern Chernihiv region, while 12 more were injured
2:42PM ( 1 hour ago )
AP Business
EU plan aims to help get wheat from Ukraine to the world
The European Commission is proposing to help Ukraine move its critical grain supplies to parts of the world at risk of food insecurity
12:50PM ( 2 hours ago )
Live updates | UN focuses human rights inquiry in Ukraine
The U.N.’s top human rights body has overwhelmingly passed a resolution calling on its investigators to specifically look into possible rights abuses and violations in northern Ukraine shortly after Russia’s invasion
12:24PM ( 3 hours ago )
Biden hosts ASEAN as he looks to show Pacific commitment
President Joe Biden is hosting leaders from the Association of Southeast Asian Nations as his administration continues an effort to demonstrate that the United States hasn’t lost focus on the Pacific
11:56AM ( 3 hours ago )
AP Business - Economy
Managers fired from Twitter amid Musk buyout turmoil
In the latest sign of turmoil inside Twitter amid Elon Musk's planned buyout of the company, a Twitter general manager, Kayvon Beykpour, is leaving after 7 years
3:41PM ( 5 minutes ago )
California lawmakers raise awards for malpractice lawsuits
The California Legislature has voted to increase how much money people can win in medical malpractice lawsuits
3:39PM ( 7 minutes ago )
Senate confirms Powell for 2nd term as Fed fights inflation
The Senate on Thursday confirmed Jerome Powell for a second four-year term as Federal Reserve chair, giving bipartisan backing to Powell’s high-stakes efforts to curb the highest inflation in four decades
3:38PM ( 7 minutes ago )
Trump scrambles to fend off Oz challenger in Pa. Senate race
Sensing a threat in Pennsylvania’s U.S. Senate race, Donald Trump has issued a warning that surging Republican candidate Kathy Barnette would threaten the GOP’s chances of holding the seat in November
3:17PM ( 28 minutes ago )
Parents swap, sell baby formula; Biden to talk to businesses
A shortage of baby formula in the United States is driving parents to swap, sell and offer leftover supplies to each other
3:17PM ( 28 minutes ago )