The UST collapse has drawn global regulatory attention, with many countries reiterating stablecoin regulation.

Recently, the USD algorithmic stablecoin UST on the Terra blockchain experienced a severe de-pegging event, drawing significant attention from global regulatory agencies towards the cryptocurrency market. This incident not only had a major impact on the crypto space but also prompted regulatory bodies in various countries to re-examine stablecoins and the entire crypto market.

On May 8th, UST began to significantly deviate from its dollar peg, dropping to a low of $0.04 within just 5 days, a deviation of up to 97.7%. At the same time, the LUNA coin associated with the issuance of UST also experienced a steep decline, approaching zero at one point. This event quickly triggered a chain reaction worldwide.

As the birthplace of the Terra project, South Korea took the lead in taking action. On May 17, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) of South Korea launched an emergency inspection of local cryptocurrency exchanges. The regulators requested the exchanges to provide relevant trading information related to UST and LUNA, including trading volume, closing prices, and trading quantities. The head of the FSS emphasized the need to strengthen cooperation with international regulatory agencies, given the cross-border trading characteristics of crypto assets.

At the same time, the South Korean political circles have begun to question Terraform Labs. Representatives of the ruling party have called for a parliamentary hearing on the risks of UST and proposed to invite Terra CEO Do Kwon and exchange executives to participate in the discussion.

In the United States, the Treasury Department and the Securities and Exchange Commission (SEC) have also refocused their attention on stablecoins. Treasury Secretary Yellen directly mentioned the TerraUSD incident, emphasizing the need to impose bank-like regulatory requirements on stablecoin issuers. SEC Chairman Gensler stated that they will continue to act as the "police" of the crypto asset market to protect investor interests.

The UK has adopted a more targeted regulatory strategy. On May 10, the UK Treasury announced the advancement of its stablecoin regulatory plan, but explicitly stated that algorithmic stablecoins are not included. The UK government believes that certain stablecoins are not suitable for payment purposes because they share characteristics with unsecured crypto assets.

In Europe, the President of the French central bank revealed that cryptocurrency regulation issues will be discussed at the upcoming G7 finance ministers' meeting. This indicates that cryptocurrency regulation has become a key topic of concern for major economies worldwide.

As the impact of the UST incident continues to expand, it is expected that countries will accelerate the development and improvement of regulatory frameworks for stablecoins and the entire cryptocurrency market in the future. This trend may have a profound impact on the direction of the crypto industry and also provide more protection for investors. However, finding a balance between encouraging innovation and protecting investors will remain an important challenge for regulatory agencies in various countries.