“The recent collapse of the TerraUSD stablecoin and associated sell-off in crypto markets has shown that hype-driven growth can lead to bubbles, harm consumers, and crowd out productive innovation,” said Hsu, whose agency will likely have a prominent role in regulating stablecoins and chartering crypto firms seeking to become banks. He argued that the incident demonstrated that crypto failures can have wider effects as this one “sparked contagion to the largest stablecoin, Tether, and to the broader crypto ecosystem.”
