U.S. Treasury Secretary Janet Yellen focused on the ongoing plight of the stablecoin UST during her testimony before a U.S. Senate committee Tuesday, just hours after the token, which is supposedly pegged to the dollar, fell to a low of $0.65 and at least one platform halted trading.
Speaking at a Senate Banking Committee hearing on risks to the stability of the U.S. financial system, Yellen told senators that UST "have had a run and lost value."
"I think that just shows that this is a fast-growing product and there are risks to financial stability, and we need a framework that is appropriate," she said. She later said legislation to regulate cryptocurrencies this year would be "appropriate."
Sen. Pat Toomey, the ranking Republican on the committee who is pushing for legislation to oversee stablecoins, was quick to point out that UST is an algorithmic stablecoin.
"That means by definition it's not backed by cash or securities like the more conventional - if you can call them that - stablecoins," he told Yellen. "I think that's an important distinction."