According to sources, Tether (USDT) co-founder Reeve Collins believes the collapse of TerraUSD (UST) — which has now been renamed TerraClassicUSD (USTC) — might be the spark for the demise of other algorithmic stablecoins.
Collins made the remark to the news source while speaking at the World Economic Forum in Davos, Switzerland. He went on to say that the fall “was not unexpected.”
Collins said: “It’s an algorithmic-backed, stablecoin. So, it’s just a bunch of smart people trying to figure out how to peg something to the dollar.”
Many people have cashed out UST in recent months after realising the stablecoin was not viable, according to Collins. As a result, the stablecoin fell in value, dragging the entire crypto market down with it.
Collins feels algorithmic stablecoins haven’t seen the worst of it yet, despite the present negative crypto market. Other algorithmic stablecoins, he believes, will soon follow UST, bringing the category to an end.
Jeremy Allaire, the CEO of USD Coin (USDC) issuer Circle, feels the age of algorithmic stablecoins isn’t over yet.
He went on to say, “I’ve compared algorithmic stable coins to the Fountain of Youth or the Holy Grail. Others have referred to it as financial alchemy.”
To that end, he believes that financial alchemists will continue their quest for the Holy Grail of a steady value.
To read our blog on “The collapse of ‘stablecoin’ threatens to break Bitcoin’s losing run,” click here.
