Fed warns on crypto risks as major stablecoin breaks peg

US Federal Reserve
Photo: Flickr/US government/Britt Leckman

The US Federal Reserve warned of the risks posed from stablecoins in its latest financial stability report, which was published the same day as a major stablecoin broke its peg to the US dollar.

TerraUSD, the fourth-largest stablecoin by market capitalisation, plunged in value on May 9 amid a widespread sell-off in the crypto market and broader financial markets. The stablecoin is down around 7% in the past day, having recouped some of its earlier losses.

TerraUSD’s inability to maintain a

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