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Seeking Alpha 2022-05-18 19:58:00

Stablecoin Panics May Be A Feature Not A Bug

TerraUSD, one of the many cryptoassets whose value was supposedly pegged to the U.S. dollar, imploded last week.Crypto derivatives are often denominated in Tether, which is also often used as collateral. Its collapse would inflict widespread losses.With minimal interest income, a fully cash-backed stablecoin might have to charge transaction fees to cover its costs, potentially sending users elsewhere.

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