A new study from Deutsche Bank questions the stability of stablecoins and Tether’s financial stability. Tether, the most popular stablecoin in the world, is completely at odds with this study.
When the study came out on May 7, it looked at 334 currency pegs that went back to 1800 and found that only 14% held up over time. In the same way, the researchers used this method to look at stablecoins because they had concerns about how sensitive the asset class was to events like volatility and de-pegging.
The study discussed how TerraUSD dropped in May 2022, and the market lost an amazing $45 billion in just one week. It also discussed the risks of stablecoins and how important it is for the government to take control immediately and make everything open.
Tether Targeted, Doubts Raised
Deutsche Bank specifically went after Tether, making people worry about its ability to pay its bills and its place in the world of crypto futures. There was a “Tether peso moment” in the story, and players who used leverage would lose much funds. This would have an impact on the whole crypto world.
The study also discussed a March poll of 3,350 people in six countries. It found that 42% of those people think stablecoins will do worse than well, while only 18% think they will do better. The question was asked of people from the US, France, Germany, Spain, Italy, the UK, and France.
Many people at Deutsche Bank were worried about how Tether’s success in the stablecoin market might affect the futures market. They talked about how unstablecoins lose their pegs all the time and how hard it is to keep track of the ones still out there.
Tether replied that the report was flawed because it lacked “clarity and substantial evidence” and relied on “vague assertions” instead of an extensive analysis. The company that makes stablecoins said the study didn’t back up their claim that the coins’ prices would drop.
