Bloomberg Tax
May 24, 2022, 8:45 AM

Colossal Terra Crash Amplifies Calls to Open Stablecoin Books

David Jolly
David Jolly

The collapse of the TerraUSD stablecoin raises a question: Would new audit rules help prevent another, possibly more destructive, stablecoin death spiral?

The debacle—in which Terra went from multibillion-dollar valuation to nearly zero in a matter of days—has shown the need for regulatory clarity on how stablecoins are audited, said Sean Stein Smith, chair of the Wall Street Blockchain Alliance’s accounting working group and a lecturer at Lehman College in New York.

“The key questions are: How do they operate, and how is this information communicated,” he said. “The meltdown at Terra is only the most recent example of why ...

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