Most stablecoins are doomed to fail and lose the peg according to Deutsche Bank

Deutsche Bank analysts believe most stablecoins are doomed after an internal analysis of 334 currency pegs over the past 200 years.

“Some may survive, although most will likely fail,” the German banking powerhouse wrote in a study published on Tuesday. Analysts argued that the few currency pegs that have held power since the 1800s operated with credibility, reserves and a tightly controlled environment, all of which they say stablecoins lack. Tether (USDT), the world’s largest stablecoin with a market cap of $110 billion, has a “monopoly in the stablecoin market that has been filled with speculation and a lack of transparency,” they said. Tether regularly publishes Reserve Accreditation Reports with the help of BDO, the fifth largest accounting network in the world. Unlike its biggest competitor, Circle, it has yet to undergo a full audit by a Big Four accounting firm. Before publishing its accreditation reports, Tether was forced to pay $41 million in fines to the Commodity Futures Trading Commission (CFTC) for misleading statements about its reserve composition. In studying past currency swings, the researchers noted that stablecoin issuers should pay attention to macroeconomic factors. “Governance-related issues and speculative forces could also signal when there is a possibility of decoupling,” they said. Tether responded to the Deutsche Bank report saying it relied on “vague assertions” to support its claims, without “concrete data to forecast a decline in stablecoins more broadly. SPECIAL OFFER (sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

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