Are All Stablecoins Created Equal?
Symphony Digital
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A stablecoin is widely known as a digital currency that has its value pegged to a “stable” reserve asset.? This stability enables reduced volatility for stablecoins to play several critical roles, such as, being 1) a bridge between traditional fiat and crypto currencies; 2) a medium of exchange to trade in and out of more volatile cryptocurrencies; 3) the collateral in DeFi applications and crypto derivative transactions; and 4) a form of payment domestically and internationally.
With the high profile de-anchoring from the $1 peg of UST , in this short report, titled Are All Stablecoins Created Equal?, we seek to explain the various types of stablecoins and also examine the recent developments around UST.
We are once again reminded that we need to be vigilant about the specific risks associated with each investment, even if it carries the name of a “stablecoin”.
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