Dogecoin insider Mishaboar has sent an open letter to the community with advise to shun stablecoins like USDT, USDC and even PYUSD. According to him, holding these assets are “inherently risky” and can harm holders.
Bitcoin, Litecoin and Dogecoin For Stablecoins
Per the post shared on X, Mishaboar noted that these stablecoins are risky for many reasons. First, he said there is always the possibility of their backing or reserve asset collapsing. This is arguably one of the most controversial subjects in the industry.
Besides the issue of collapsing reserve, the Dogecoin insider noted that these stablecoins are highly centralized. With specificity, he named USDT and USDC, the two biggest in the industry. With Paypal stablecoin PYUSD also gaining traction, he added this to the list. He claimed entities behind these assets including Tether, Circle and PayPal could freeze users’ assets if they are asked to.
Dear #Dogecoin, as I have repeated countless times:
holding “stable”coins like USDT or USDC or PYUSD is inherently risky. Not just in the (always possible) case of a catastrophic collapse of whatever castle of cards or institution is backing them.
They are risky assets…
— Mishaboar (@mishaboar) October 25, 2024
Despite the roles of stablecoins in the market, Mishaboar believes holding Bitcoin, Dogecoin, Litecoin and Monero is better. He claimed though provocative, Monero is much less risky overall. Against the core positions of most crypto proponents, Mishaboar also advocated holding fiat currencies with real value. Comparatively, he believes this are comparatively safer.
Will Stablecoin Regulation Help?
Some of the concerns voiced by the Dogecoin proponent are largely what regulations can fix. Notably, Tether CEO, Paolo Ardoino has called for stablecoin regulation in the United States as a trusted framework is still missing.
The centralization risks can also be addressed with the right rules. Thus far, regions the the European Union have introduced Markets In Crypto Assets (MiCA) to help guide stablecoin issuance.
The collapse of Terra-linked algorithmic stablecoin USTC underscores the fears from Mishaboar. With over $40 billion lost wiped out of the market, regulators around the world are now making moves to prevent recurrence. Earlier this year, US regulators unveiled a regulation to ban algorithmic stablecoin.
According to proponents, if the industry work together, some of these pain points may be properly addressed.
Read More: Breaking: US DOJ Launches Investigation Into Tether
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