Stablecoins are designed to maintain a ‘stable’ fixed value but sometimes fail. How does this happen, and why? Explore the world of stablecoin depegging.
— issues DAI, an algorithmic stablecoin designed to preserve a precise 1:1 ratio with the U.S. dollar. However, DAI also fell off its peg amid the Silicon Valley Bank’s collapse, mainly due to a contagion effect from USDC’s depegging. Over 50% of the reserves backing DAI are held in USDC.
The importance of stablecoin pegs is in providing a stable and predictable value relative to an underlying asset or basket of assets — typically a fiat currency like the U.S. dollar. Stablecoins are a desirable alternative for various use cases, includingWith stablecoin pegs, traders may enter and exit positions without being subjected to the price fluctuations of cryptocurrencies like BTC or ETH.
Stablecoin pegs can also increase financial inclusion, especially for people and enterprises without access to traditional financial services. Stablecoins can be used to make payments and transact in digital assets without requiring a bank account or credit card, which can be crucial in developing and emerging markets.Stablecoins can depeg due to a combination of micro and macroeconomic factors.
On the macroeconomic front, if there is high inflation, the purchasing power of the underlying assets that support the stablecoin may drop, leading to a depeg event. Similarly, adjustments to interest rates or other macroeconomic measures may impact stablecoin demand.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Circle’s USDC instability causes domino effect on DAI, USDD stablecoinsOther popular cryptocurrencies, such as Tether (USDT) and Binance USD (BUSD), continue to maintain a 1:1 peg with the US dollar.
Lire la suite »
Cardano Founder Says Algorithmic Stablecoins Are Essential for Bitcoin (BTC) to Achieve Its VisionCardano founder: Algorithmic stablecoins essential to realize Bitcoin (BTC) vision BTC $BTC ADA $ADA CardanoADA CardanoCommunity
Lire la suite »
USDC Stablecoin Depegging Causes Concern Among Crypto Advocates, 5 Other Stablecoins Slip Below Parity – Bitcoin NewsThe second-largest stablecoin $USDC, issued by Circle Financial, fell below $0.90, reaching a low of $0.877 per coin.
Lire la suite »
Insolvency fears led many to turn to other stablecoins, sell USDC at a major discountMany USDC holders have fled to other stablecoins amid fears surrounding its solvency, but not all of them have been successful during panic selling.
Lire la suite »
Do Kwon had the right idea, banks are risk to fiat-backed stablecoins: CZGiven Silicon Valley Bank’s direct involvement in destabilizing USDC prices, CZ blamed banks for increasing the risks of stablecoins.
Lire la suite »
Explore latest garden trends at McHenry County GardenfestExplore the latest gardening trends, techniques, and tools at McHenry County Gardenfest, a daylong series of seminars and workshops for gardeners of every skill level.
Lire la suite »