Can Stablecoins Get Past Their Instability?

Can Stablecoins Get Past Their Instability?

This post is part of Consensus Magazine’s Trading Week, sponsored by CME. Rajeev Bamra is a senior vice president and head of DeFI and digital assets at Moody’s Investors Service.

Stablecoins, cryptocurrencies designed to hold a stable value through a peg to an underlying asset, such as the U.S. dollar, have gained popularity for their potential to provide the flexibility of cryptocurrency without its price volatility. Their design — whether fiat-backed, as most are, or algorithmic (i.e. backed by other assets or cryptocurrencies) — is meant to offer users a refuge from the price gyrations of traditional cryptocurrencies like bitcoin (BTC) and ether (ETH).

One significant advantage of

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