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73% of Finder’s Panel Think Regulators Will Demand Stablecoins Are Fully Collateralized

As a result of the TerraUSD collapse, 73% of Finder’s panel think regulators will demand that stablecoins are fully collateralized as seen in Stablecoin report:

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Stablecoins

Just 2% of Finder’s panel thinks Terra’s hard fork revival plan will be successful. The vast majority (80%) say it won’t be successful and the remainder are unsure.

Luna classic and Luna 2.0

  • 56% of the panel think it was inappropriate for exchanges to support the Luna 2.0 token just weeks after the collapse of Luna classic. 22% said it was appropriate and 22% were unsure.
Terra (LUNA) price prediction
  • Luna 2.0 is predicted to be worth $0.84 by the end of the year and $0.46 by 2030.

CoinFlip founder and chairman, Daniel Polotsky: 

“I believe the Luna brand will likely be damaged goods for the remainder of its existence (at least within the blockchain field). An algorithmic stablecoin based on trust is feasible, but it will most certainly not be hosted on a blockchain called Luna. Even without the algorithmic stablecoin, I believe Luna has left a sour taste in too many people’s mouths to make any sort of noteworthy comeback.”

Algorithmic stablecoins

  • Nearly three quarters (73%) of the panel think regulators will demand that stablecoins are fully collateralized by non-crypto assets as a result of the TerraUSD collapse. 10% think the contrary and 17% are unsure.
  • The panel thinks Tron USD (88%), Neutrino USD and Magic Internet Money (81% each) are the algorithmic stablecoins most at risk of losing their peg.

University of London co-director at The Centre of FinTech, Dr Iwa Salami:

“It is vital that stablecoins are regulated if the credibility of the crypto-industry is to be regained. If the main feature that is meant to guarantee stability in the space is the very source of its vulnerability, then that is a big problem that needs to be addressed and best so through regulation.”

Thomson Reuters technologist and futurist Joseph Raczynski:

“Stablecoins need to be broken into at least two classes, algo and backed tokens. The Luna example, like five others before it, show thus far algos do not make sense. They need to be backed by something more tangible. Regulators need to draw a distinction between these two groups and not bucket them together.”

Tether

  • A third (33%) of the panel don’t think Tether’s reserves are adequate to cover the number of USDT tokens in circulation. 38% believe the contrary and 29% are unsure.
  • A quarter (24%) of the panel said it was a ‘big risk’ for Tether not to specify which non-US government bonds it was partially backed by.

Digital Capital Management MD Ben Richie:
“The reserves in the transparency section on Tether’s website seem well-diversified, but an enormous redemption may affect its peg with the USD. The market volatility may also affect some of the assets in reserve, which is a little confusing whether the USDT is 100% backed or not. The non-US government bonds may pose a relatively small risk as the allocation is too small for the whole reserves.”

CoinFlip founder and chairman Daniel Polotsky:

“Tether should do a better job of being transparent with Web3 participants. With so much daily trading volume relying on USDT, Tether should be audited by a prominent accounting firm and release the results publicly. Tether should also only back each USDT with an actual dollar, as the price of non-US government bonds can fluctuate and potentially break USDT’s peg during price declines.”

University of Canberra senior lecturer John Hawkins:
“Tether’s track record of not revealing its asset backing leaves it vulnerable to the equivalent of a bank run.”

USDC

  • 59% say now is the time to switch to USDC given it has a more favorable regulatory status and DeFi capability compared to Tether.
USDC will usurp USDT - Stablecoins
  • 78% think USDC will usurp USDT as the leading stablecoin in the market. 22% think this will happen as soon as the end of the year.

Swinburne University of Technology director of Tech Innovation and Entrepreneurship Dimitrios Salampasis:

“I am of the opinion [that] USDC is safer, more transparent and more compliant towards governmental regulations. Moreover, USDC has more transparency in relation to its reserves. I still have not seen a full and proper audit from USDT.”

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CloudTech Group COO Kevin He:

“In addition to the hidden problems with the liquidity of collateral for stable coins, even if the collateral is all in US dollars, who will be supervising this money? Blockchain value exists in consensus, because USDT’s user base is large leading USDT has a strong consensus, as long as this user consensus is in place there will be less concern, however, when people start questioning about the stablecoin and its backed assets, it then comes under the pressure of a run, leading to the occurrence of depegging.”
Swan.com CTO Yan Prtizker:

“Whoever is most transparent will survive in the near term. Long term stable coins will be extinct.”

Stablecoins
Stablecoins

You can find the full report HERE.

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  1. Pingback: Tether Announces Alignment with Top Five Accounting Firm – TechEconomy.ng - TechEconomy.ng - ABHI BEE

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