Post the Terra UST fiasco, heres how Japan plans to protect crypto investors
Categories: US DIGITAL CURRENCY
The crypto market underwent a massive correction period, the aftereffects even experienced till today. The largest decentralized stablecoin on the market (once upon a time), UST, faced a total collapse. Investors, traders and users lost a significant chunk of the value of their investments amidst the crypto crash which triggered a sell-off in the market.In light of the disaster, regulators looked to tighten scrutiny and supervision of crypto exchanges and (unsurprisingly) stablecoins to offset further damage. Japanese regulators have introduced a legal framework around stablecoins given last months collapse of the TerraUSD token. According to a local news agency, later highlighted by Bloomberg on 3 June, Japans parliament passed a Stablecoin bill that clarified the legal status of stablecoins.At the time of writing, only Japan’s largest bank, Mitsubishi UFJ, announced its intention to create a stablecoin to promote solvency. The bank, unit of Mitsubishi UFJ Financial Group Inc., said the token will be fully backed by yen that’s placed in a trust account. Ergo, aligning with the latest regulation. Governments around the world raced to erect guardrails around stablecoins. For instance, South Korean regulators rode this bandwagon. Post the Terra fiasco, regulatory watchdogs established a unified standard for analyzing the risk characteristics of virtual assets.