- Ken Griffin, the CEO of Citadel Capital stated in his latest interview that the downfall of Terra (LUNA) acts as a wake-up call for the regulators.
- The recent stablecoin meltdown should push authorities to devise proper crypto regulations, especially for stable coins.
- Griffin then notes that the question that the reserves back Tether (USDT) still looms around it. According to Griffin, the proof of the reserves backing stablecoins should be accessible and verifiable.
Ken Griffin, the CEO of Citadel Capital, says regulators should take the downfall of Terra (LUNA) as a wake-up call.
Griffin believes the Terra (LUNA) collapse followed by its de-pegging TerraUSD (UST), the flagship stablecoin of the blockchain protocol, should act as the motivation for the authorities to introduce clear and necessary regulation, in particular stable coins.
The CEO says that stablecoins by virtue of their names, almost demand to be properly regulated.
Griffin also points out that the question that the reserves back Tether (USDT) still surrounds the largest stablecoin by market cap and volume. The proof of the reserves backing stablecoins should be accessible and verifiable, according to Griffin.
He then reveals that Bloomberg has done some incredible work on Tether. But then goes on to say that it is absurd that we have no idea who’s behind Tether.
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.”
He believes that if someone claims to have a stable coin whose worth is a dollar, then they should have no problem backing it with a custody account that shows the assets that define that stability.
Further, the Citadel Capital CEO said there should be a law that requires the stablecoin issuers to reveal the reserves backing the fiat-pegged crypto assets from time to time, pretty much like how the exchange-traded funds (ETF) are required to reveal the underlying assets periodically.
“Just as we have daily disclosures of the ETF holdings, we should have periodic disclosure of what backs the stablecoins so that people know whether their money is safe or not,” he added.
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Source: https://www.thecoinrepublic.com/2022/05/22/take-lunas-collapse-as-a-wake-up-call-says-citadel-capital-ceo-addressing-regulators/