The chief executive officer of Citadel Capital shared his opinion on the recent incident of the Terra ecosystem.
Terra is a blockchain Network, which was developed by Terraform Labs. On 8 May, Terra’ Stablecoin UST & Native coin Luna started to face high pressure sell amid the critical market situation. Due to the high pressure of sales and panic among the investors, because of the algorithmic-based concept of the UST coin, the Terra ecosystem collapsed into almost zero value.
Ken Griffin, Chief executive officer of Citadel Capital, appeared in an interview on Bloomberg Market and Finance. During the interview, Ken said that depegging the value of UST stablecoin should force the regulatory bodies to introduce the necessary regulatory framework for the stable coins issuer companies.
Further Ken added:
“I do think that the Terra catastrophe should be a wake-up call to D.C. to focus on thoughtful regulation. And in particular stablecoin, by its name, almost demands being appropriately regulated.”
The CEO of Citadel Capital also noted the increasing questions behind the biggest Stablecoin Issuer company Tether and emphasized to force these companies to provide full reserves backing stablecoins and also available data should be verifiable.
Ken also figured out that analysis of Bloomberg on Tether doesn’t provide clarity, whether what the actual thing is behind the company. So better to have a crypto custody account, where we can have the security of the stability of funds.
Citadel CEO also proposed a suggestion to all stablecoin issuer companies to provide all the reserved backed assets data, because these are just like Exchange Traded fund products. So in this way, he believes that such data may reveal easily whether stablecoin users’ money is safe or not.
“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.”