On Monday, cryptocurrencies fell back to their previous levels as regulators kept the wheels turning.

European officials reiterated their concern about the risks associated with cryptocurrencies.

Bitcoin dropped 5 percent to $29,700 (EUR28.500) Monday in Asian trade. This was due to worries about rising interest rates and high inflation.

The world's biggest cryptocurrency has lost about a fifth of it's value this month due to the dramatic collapse of TerraUSD, a stablecoin. This has caused crypto markets to fall amid widespread selling of risky investments.

TerraUSD broke its 1:1 dollar peg last week, and is now trading at $0.14 cents (EUR0.13) according to coingecko. This has brought particular attention to stablecoins, and their important role in the crypto system.

Financial regulators have received some of this attention.

Francois Villeroy De Galhau, Governor of Bank of France, stated Monday at a conference that crypto assets could cause disruption to the international financial system if not properly regulated and interoperable across jurisdictions.

Stablecoins are at risk

He cited stablecoins as one source of risk, though they were misnamed.

Separately, Fabio Panetta (member of the executive board at the European Central Bank) also stated Monday that stablecoins are vulnerable to runs.

Tether, the largest stablecoin in the world, lost its 1:1 peg on May 12 but quickly recovered. Tether, the world's largest stablecoin, briefly lost its 1:1 peg on May 12, but then recovered.

Ether, the second largest cryptocurrency, dropped 5.6 percent to $2,000 (EUR1,919) Monday.

Other regulators are also worried. Last week, the US Federal Reserve warned that stablecoins are vulnerable to investor runs as they are backed by assets that can lose value or become inliquid during times of market stress.