Researcher at the Institute of Finance, Chinese Academy of Social Sciences: Whether stablecoins can remain stable remains to be seen

On July 28, according to Jinshi Data, Hu Zhihao, a researcher at the Institute of Finance of the Chinese Academy of Social Sciences and deputy director of the National Institution for Finance & Development, published an article in the Economic Daily stating that in 2017, $USDT, which was still in its early stages of development, triggered a crisis of confidence due to doubts about the authenticity of its reserves. In March 2023, USD Coin ($USDC), known for its "reserve transparency and strong compliance," also experienced a run due to the fact that a portion of its reserve assets were deposited in Silicon Valley Bank, which went bankrupt. If fiat-backed stablecoins are like this, then what about the various "death spirals" that algorithmic stablecoins have experienced? This forces us to take seriously the fact that stablecoins with partial monetary functions must accept corresponding regulation due to their public good attributes. At present, we must neither turn a blind eye to the stablecoin craze, nor rush into it blindly. We should recognize the essence of stablecoins, promote their advantages and avoid their disadvantages, and strive to create a good ecosystem for promoting the healthy development of the digital economy. [TechFlow]