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Terra LUNA Price drops as House Bill may ban Stablecoins like “TerraUSD”

Terra LUNA Price drops as House Bill may ban Stablecoins like “TerraUSD”

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The fall of Terra was an eye opener for many. The “algorithmic” generation of crypto assets has been equated with creation money from magic, and people’s faith in Stablecoins without of real property is on the decline. House Stablecoin bill is on the horizon as it includes a ban on such cryptocurrencies – Terra LUNA Price has dropped in response.

The Terra LUNA trading candles are a little green today, but their height suggests that they could change colors at any moment, as accumulation indicates a lack of interest on the part of the client.

Things are not looking good for stablecoins

Bloomberg reporters obtained a copy of the Stablecoin bill. It states that Parliament is currently drafting the Stablecoin Act, which would impose a two-year ban on cryptocurrencies such as TerraUSD, the algorithmic Stablecoin that collapsed and almost took the entire market with it.

If passed, this bill would make it a crime to issue or create “endogenously secured stablecoins” based on the value of another digital asset.

It should be noted that unlike traditional Stablecoins like USDC, algorithmic Stablecoins like TerraUSD have come under fire because their value depends on another volatile asset. USDC, on the other hand, is supported cash and short-term US Treasuries. The same applies to USDT (TetherUSD), which is 100% backed by its fund.

The Security Exchange Commission will also look into these assets

Algorithmic Stablecoins don’t just have to fight the house. The Security Exchange Commission, the US Treasury Department and other regulatory bodies are also gearing up for their fight against algorithmic Stablecoins.

The cryptocurrency crowd should be a little concerned because most regulatory bodies have not been kind to crypto. The current battle between the SEC and Ripple is proof of that.

However, for now, the public should have nothing to worry about. The Parliament Act is not ready yet, and there will probably be many changes to it. Some of the key points of algorithmic stablecoins are likely to remain.

Block writes that the bill also has certain rules for general stablecoins.

Issuing a stablecoin without regulatory approval is punishable by up to five years in prison and a million dollar file.

The bill is still being negotiated between Patrick McHenry and Maxine Walters. The final signature has not yet been placed on the invoice.

Crypto Twitter reacted to this development

Crypto reactions to this ban range from indifferent to bullish. These reactions come as a surprise to many who have always thought that the cryptosphere has always wanted less oversight.

But there are also users who complain that the bans are far too long.

Other crypto Twitter channels have started inviting their followers to stack USDC, labeling it as the safest stablecoin in the world.

Terra Classic prices

Terra went through many rallies last month, defying market fundamentals and necessarily all odds. However, it appears that the rally has slowed down. Although it peaked at $0.00058 a couple of weeks ago, the price of Terra Classic has now been corrected to $0.00028. It is not known if the current market fundamentals are to blame for this situation or if the crypto people have finally come to their senses.

The regulations mean long-term upside for crypto experts

Many crypto commentators have come to the conclusion that increasing demands for regulation would only be good for the crypto market in the long run. The introduction of new measures will only stabilize the currently unstable crypto market, thus promoting public confidence in crypto.

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