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Experts of the crypto world began to declare that algorithmic stablecoins will fail one after another. They were even supported by tether (USDT) co-founder Reeve Collins and many other industry professionals. The developer assured that the fall of TerraUSD (UST) was the beginning of the end for this asset class.
According to the expert, his product, provided with real funds, was under pressure, losing value for several days. While algorithmic stablecoins have completely fallen in price by 20% or more. In addition, due to the situation with Terra, stablecoins were under the scrutiny of governments and regulators. Regulatory authorities in the United States and the United Kingdom have planned to develop a joint regulatory framework for this type of virtual asset.
Collins stressed that algorithmic stablecoins have the least chance of survival, since they are based on smart contracts that tie their collateral to other cryptocurrencies, unlike USDT or USDC.
The specialist noted: he is sorry that this happened to a promising asset class. He said that a bunch of smart people trying to figure out how to tie something to the US dollar, this time could not cope with the task.
The head of the issuing company OF USD Coin (USDC) Jeremy Allaire assured that programmers will continue to create algorithmic stablecoins to develop the most optimal mechanism without a real binding to fiat money in storages. However, he also said that the sector will be hit very hard because of what happened in May 2022.
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