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On January 31, Russian Deputy Foreign Minister Grushko stated that the best guarantee for Ukraines security is a concrete guarantee of Russias security, a guarantee that no one in the West has offered. He emphasized, "If we believe that Ukrainian territory will not be used as a bridgehead threatening Russias security, then Ukraines security will also be guaranteed." The Russian Foreign Ministry previously stated that any scenario involving NATO member states deploying troops in Ukraine is absolutely unacceptable to Russia and could lead to a sharp escalation of the situation. The Russian Foreign Ministry also stated that statements from Britain and other European countries regarding the possible deployment of NATO troops in Ukraine are incitement to continue the conflict.January 31st - According to Yahoo Finance, Kevin Warsh, President Trumps nominee for Federal Reserve Chairman, appeared in newly released Epstein case documents released by the US government on Friday. The documents show that Warshs name was listed in the email guest list for the "2010 St. Barths Christmas" event, alongside figures such as Russian oligarch Roman Abramovich; he also attended a dinner hosted by British aristocrat William Astor. This revelation occurred on the same day Warsh was nominated for Fed chairman. His main controversy previously stemmed from his relationship with Republican donor Ronald Lauder, who was accused of influencing Trumps interest in Greenland during his first term and holding business interests there. Warsh may now need to address his relationship with Epstein and his 2010 Christmas trip, and there is also speculation that Trumps nomination is related to their shared social circle.January 31 – With the House of Representatives in recess and unable to consider the appropriations bill, the U.S. federal government entered a technical, partial shutdown at midnight local time on January 31. Analysts point out that although the shutdown is expected to be short-lived, it once again highlights the structural predicament of U.S. fiscal politics. In recent years, temporary funding, short-term extensions, and marginal shutdowns have become the norm in congressional budget battles, with government operations frequently hampered by political disagreements. Currently, the market generally believes that the direct impact of this technical shutdown on financial markets and economic operations is limited, but if subsequent congressional negotiations are again stalled, the risk of a prolonged shutdown and a wider impact cannot be ruled out.January 31st - The US government officially began a partial shutdown early this morning local time. This followed the Senates passage of a spending bill to fund most federal government departments, which was then submitted to the House of Representatives for consideration. However, because House members were not in Washington and would not return until Monday (February 2nd), the Senate vote could not prevent a partial government shutdown.January 31st - According to the UKs Daily Telegraph, British Prime Minister Keir Starmer responded to US President Trumps remarks on Sino-British cooperation in Shanghai on the 30th, stating that ignoring China would be "unwise." "It would be unwise to simply say we should ignore it. You know, French President Macron has already visited (China) and had exchanges, and German Chancellor Merz is also coming to exchange views," Starmer said. "It would not be in our national interest for Britain to be the only country refusing to engage (with China)." Starmer added, "In the past 24 hours, the opening of market access has been warmly welcomed by the business community. They have reported a change in the atmosphere and a significant increase in willingness to cooperate. This is good for our economy."

Stablecoin Terra’s Broken Dollar Peg Hits Wider Crypto Markets

Jimmy Khan

May 11, 2022 10:30

One of the world's major stablecoins, TerraUSD, dropped a third of its value on Tuesday, causing concern among cryptocurrency investors and contributing to bitcoin's first drop below $30,000 in ten months.


Stablecoins are digital currencies that are linked to conventional assets like the US dollar. They are often used by traders to transfer cash around and speculate on other cryptocurrencies, and they are popular as safe havens in times of crypto market turbulence.


TerraUSD, often known as 'UST,' is an algorithmic stablecoin and one of the most valuable in terms of market capitalization. According to pricing tracker CoinGecko, it shattered its 1:1 peg to the dollar on Tuesday and plunged as low as 67 cents.


TerraUSD gained notoriety earlier this year when the non-profit Luna Foundation Guard, a subsidiary of Terraform Labs, the business behind it, committed to gather $10 billion in bitcoin to sustain its dollar peg.


According to CoinGecko, TerraUSD had recovered marginally to 91 cents by Tuesday afternoon and was the world's 10th biggest cryptocurrency by market value.


Unlike other stablecoins that utilize conventional assets as reserves, TerraUSD maintains its peg with a complicated algorithm that moderates supply and demand through the usage of Luna, another balance token.


Luna Foundation Guard claimed in a tweet on Monday that it will protect TerraUSD's dollar peg by lending $1.5 billion in bitcoin and TerraUSD to over-the-counter trading businesses.


Terraform Labs and Luna Foundation Guard could not be contacted for comment.


The usage of bitcoin as a reserve has produced a vicious cycle for TerraUSD, according to Justin d'Anethan institutional, sales director at Amber Group, with sell-offs in both tokens pulling the other down.


"Bitcoin is falling because it's being sold to protect an ecosystem that's suffering; the ecosystem's suffering is causing even more fear on (TerraUSD), which is leaning on the Luna token, requiring the foundation to supplement and defend the peg with additional reserves," he continued.

"It's not a pleasant scenario."


The Federal Reserve of the United States cautioned on Tuesday in its biannual Financial Stability Report that stablecoins are susceptible to investor runs because they are backed by assets that might lose value or become illiquid in times of market stress.


"Additionally, the growing usage of stablecoins to fulfill margin requirements for leveraged trading in other cryptocurrencies may magnify volatility in stablecoin demand and raise redemption risks," it warned.

JITTERS IN CRYPTO

Stablecoins have profited from market volatility in the crypto markets in general. TerraUSD is currently rated eleventh among the top ten cryptocurrencies by market capitalization.


Other prominent stablecoins, like as Tether and USDC, claim to be backed by actual assets and so immune to the issues plaguing TerraUSD.


However, the larger cryptocurrency sector has suffered as conventional financial markets have declined.


Bitcoin dipped below $30,000 for the first time since July 2021 early Tuesday, lagging behind other typical "risk off" assets like tech stocks but also pulled down by the TerraUSD sell-down.


According to Coingecko, the world's most commonly held cryptocurrency had also recovered marginally by Tuesday afternoon, reaching $31,272.


These declines, which coincide with a drop in risk appetite, contradict some crypto fans' belief that cryptocurrencies are a store of value similar to gold.


Since hitting an all-time high of $69,000 in November 2021, Bitcoin has lost more than half of its value.


While bitcoin is now holding at a crucial support level, analysts at Singapore's QCP Capital wrote in a note that "there is considerable tail risk from the (TerraUSD) de-peg together with macro worries."

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