According to CryptoPotato, Deutsche Bank analysts believe that most stablecoins are doomed to fail after conducting an internal analysis of 334 currency anchors over the past 200 years. "Some may survive, although most are likely to fail," they wrote in a study released on Tuesday.
Analysts argue that the few foreign exchange pegs that have managed to hold up since 1800 operate in a reputation, reserves and a strictly controlled environment, all of which stablecoins lack. They say that Tether (USDT), the world's largest stablecoin with a market value of $110 billion, has a "monopoly position in a stablecoin market full of speculation and lack of transparency." Tether regularly publishes proof of reserves reports, assisted by BDO, the world's fifth largest accounting network. Unlike its biggest competitor Circle, Tether has not yet undergone a full audit by the Big Four accounting firms. Prior to publishing its proof of reserves report, Tether was forced to pay a $41 million fine to the Commodity Futures Trading Commission (CFTC) for misleading statements about the composition of its reserves.
After studying past currency pegs, the researchers noted that stablecoin issuers should be mindful of macroeconomic factors “governance issues and speculative forces that may also indicate when a depegging is likely to occur.”
Tether responded to the Deutsche Bank report by saying that it relied on “vague assertions” to support its claims and lacked “concrete data to predict a broader decline in stablecoins.”
