UST stablecoin is currently in a state of an upside-down crash. The incident has sparked some interesting speculations in the cryptocurrency markets. Some market analysts suggest that US Treasury Secretary Janet Yellen could have been involved in the recent crash of the UST token. There are rumors that Yellen worked in tandem with Citadel Capital to short the Terra native stablecoin called UST.
The root cause of the rumors is the fact that Yellen was recently tasked under the Biden administration to publish a detailed report on stablecoins. On the other hand, Citadel Capital is known as a hedge fund that gained notoriety during the GameStop shorting incident last year that made international headlines. Citadel is once again linked with shorting Terra LUNA and enticing a massive selling pressure on UST. The mass sell-off of UST started earlier this week.
There are some speculators on the cryptocurrency market who claim that Citadel investing heavily in UST does not make any sense considering that the hedge fund has not added or traded any other stablecoins before this point. There are several anonymous sources that the sharing bits of information that point towards the same possibility.
One such source declares that Citadel loaned around 100K Bitcoins and used the cryptocurrency to amass a hefty quantity of UST. Meanwhile, others believe that the timing of Janet Yellen announcing the publication of the stablecoin report is not a mere coincidence. The report published by Yellen suggests that stablecoins can destabilize the financial equilibrium.
Stablecoins’ Future in the United States
At present, the cryptocurrency community views the Tether stablecoin project to be the biggest threat in the eye of the US government. The UST stablecoin that is pegged to Terra LUNA was considered a secondary fallback in terms of the stablecoin sector. However, the UST token peg is now broken, and the stablecoin is trading at a lower cost in comparison to 1 USD.
Analysts like Dennis Porter claimed that the UST downfall is going to be the start of the US government’s intervention in the matters of cryptocurrency space. The main objective of the centralized financial regulators is to ensure that the stablecoin projects lose their credibility and are replaced by Central Bank Digital Currency or a digital dollar. Another speculation unveils that Jump Capital is opting for a $2 billion backup fund for salvaging UST.