The Myth of Stablecoin

Photo by Shubham Dhage on Unsplash

Stablecoin is essential to Defi. However, stablecoin is not as stable as it sounds 🧐.

Particularly, when the market has weakened, the stablecoin likely de-pegged ⚠️.

Stablecoin is not a currency but rather a debt 🧾 you buy from the private reserve.

Of course, you can argue that the US dollar 💵 is not a currency but a debt from the central bank.

However, will you hold stablecoin for the next 30 years compared to keeping the US dollar? It is probably not, simply because you feel it risky ⚡ to have stablecoin.

🤨 How Come Dollar Is So Strong

Image credit: https://www.researchgate.net/publication/305661915_US_DOLLAR_STABILITY_AND_THE_GLOBAL_CURRENCY_RESERVES