Sonic Labs announced that it has given up its plans to launch the algorithmic USD Stablecoin because of its new Stablecoin regulations in the USA. The company aimed to develop an algorithmic stablecoin that made a profitable profitable last March.
SONIC (S) News
The regulatory changes following the bill prepared by the US Congress led the company to re -evaluate the plans. According to the draft text, regulations to stop algorithmic stablecoins for two years were foreseen, while Sonic Labs’s interest in the project decreased.
Algo stablecoins, which leave a bad impression with Terra collapse, are quite risky especially in reserve structure and peg protection mechanism.
Stablecoin laws
In the US, both the Stable Act and the Genıus Act offers alternative approaches to algorithmic models. Existing regulations aim to apply the implementation of fixed digital assets based on corporate guarantees, while trying to prevent the repetition of problems experienced in the Terra USD in the past.
Andre Cronje, the company’s founding partner, said that the project was canceled in his share on social media.
Andre Cronje: We no longer plan to publish a USD -based algorithmic stablecoin.
The community members mentioned the possibility of developing different strategies before the regulations, while the company could also turn to alternative methods in the future.
While the leading companies try to strengthen their position due to regulatory uncertainties in the sector, the cautious approach of the US administration also draws attention. Tether, Circle and Ripple $2.21 Such leading companies are already preparing to adapt to the regulations.
This decision of the company reflects the effects of uncertainties and regulatory pressures in the market. While developments aim to reduce risks for the relevant parties, there are different opinions about the long -term effects of regulations on the sector.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
