Stablecoins – It’s Fun Until Someone Gets Hurt, Then It’s Hilarious

Stablecoins lacked consistency in 2021, with winners and losers manifesting in surprising ways. Collateralized stablecoins, specifically Tether, began to receive more scrutiny, potentially shifting the balance of power in the direction of algorithmic stablecoins. Algorithmic stablecoins caught a lot of flack over the summer with the high-profile depegging of Iron Finance’s IRON. On net though, it seems as though algorithmic stablecoins like Terra’s UST have proven that they can be implemented effectively and can hold a steady peg even with substantial turbulence in the crypto market as a whole, which bodes well for their 2022 adoption in more Web3 native DeFi applications. An interesting place to watch in the long term is the intersection between stablecoins and payment services like Visa ($V@US) and Moneygram International ($MGI@US), as these companies could take stablecoin adoption mainstream.