$BTC Unveiling the Stablecoin Industry Chain, is this 'stability' really stable?

Unveiling the Stablecoin Industry Chain, is this 'stability' really stable?

Dear friends, recently the stablecoin trend in the financial circle is quite strong, claiming low volatility and stable returns, but is it really that appealing? Today, let's take a closer look at the stablecoin industry chain!

💎 What is a stablecoin?

In simple terms, a stablecoin is a type of cryptocurrency, with the main feature being that it is pegged to a fiat currency (like the US dollar) at a fixed ratio, usually 1:1, aiming for value stability, unlike the fluctuating prices of Bitcoin. For example, if you spend 1 US dollar, you can buy 1 stablecoin, and when you want to use it, you can exchange it back for 1 US dollar, theoretically maintaining constant value.

📈 Upstream of the Industry Chain: The 'Secret' of the Issuers

The upstream of the stablecoin industry chain is the issuers. Take the well-known USDT, issued by Tether, which claims that for every USDT issued, there is 1 US dollar held in reserve in the bank. However, it has been continuously questioned for insufficient reserves and lack of transparency. Just think, if the issuer's reserve assets are inflated, what guarantees the value of the stablecoin? Once trust collapses, the price can plummet instantly.