Opinion: MERAV Ozair, PhD
Recently, Stablecoins are everywhere – this time, headed by “traditional” financial institutions. Bank of America and Standard Charged are studying their Stablecoin’s launch, where he joined JPMorgan, which launched Stablecoin, JPM COIN – which was renamed as Kinexys Digital Payments – to facilitate transactions with its institutional customers on their Blockchain platform, Kinexyss (Previouslyx).
MasterCard plans to bring Stablecoins to the main current, and join the Bleap Finance, an encryption company. The aim of this is to enable Stablecoins to spend directly on ONSAIN – without remittances or brokers – smoothly combining Blockchain assets with global payment bars of MasterCard.
In early April 2025, Visa joined the StableCoin Network Network (USDG). The company will become the first traditional financing player to join Al -Ittihad. In late March 2025, Nyse Parent Incontinental Exchange (ICE) announced that it has been investigated in USDC use requests (USDC(Stablecoin and US states, the return currency within its derivatives exchange, sales fires, data services and other markets.
Why renewed interest in Stablecoins?
Organizational clarity and acceptance
Recent moves by organizational bodies in the United States and Europe have created more clear guidelines for the use of encrypted currency. In the United States, Congress studies legislation to set official standards for Stablecoins, which enhances confidence between banks and technology companies.
European Union markets in regulating encryption requirements require that Stablecoin source in the European Union adhere to specific financial standards, including special reserve requirements and risk alleviation. In the United Kingdom, financial authorities are planning to conduct consultations to formulate the rules that govern the use of Stablecoin, which facilitates their acceptance and adoption.
The executive order of the Trump administration 14067“Promoting American leadership in digital financial technology”, supports and “enhances and growing legal and legitimate stablecoins, backed by dollars worldwide” with “prohibiting the creation, issue, distribution and use of CBDC within the state of the United States.”
This executive, followed by Trump World Liberty Financial, which calls Stablecoin as USD1, indicates that this is the era of Stablecoins, especially those related to US dollars.
Do we need more stablecoins?
Stablecoin landscape
There are more than 200 stablecoins, and more boundaries to the US dollar. Two stablecoins facility dominates the scene Stablecoin. UTETAR Usdt (USDTThe oldest stablecoin, which was launched in 2014 and USDC, which was launched in 2018, received 65 % and 28 % of the maximum Stablecoins market, respectively – both of whom are a guarantee central.
recently: Crypto wanted to topple banks, and now it’s in Stablecoin fighting
In third place, a relatively new one, USDE, which was launched in February 2024, was launched about 2 % of the maximum Stablecoin market and has a non -traditional mechanism that depends on derivatives in the Crypto Market. Although it works on the Defi protocol on Ethereum, it includes central features because central exchanges carry derivative sites.
There are three initial mechanisms for Stablecoins:
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Central, enthusiastic: The central company maintains asset reserves in a bank or confidence (for example, for currency) or cellar (for example, for gold) and the distinctive symbols (i.e. stablecoins) that represent a demand for the basic asset.
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Decentralization, encrypted by: Stablecoin is supported by other decentralized coding assets. One example can be found in Makerdao Stablecoin Dai (Dai), Which is linked to the US dollar and envelops decentralization features. While the central organization controls the central stablecoins, any one entity controls the Dai version.
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Decentralization, non -central: This mechanism guarantees the stability of the value of the currency by controlling its supplies through an algorithm implemented by a smart contract. In some respects, this is not different from the central banks, which also does not depend on reserve assets to maintain the value of their stable currency. The difference is that central banks, such as the Federal Reserve, publicly sets a monetary policy that depends on the standards of understanding well, and placing them as a legal tender source that provides the credibility of that policy.
Discrimination, risks and fraudsters
Stablecoins is supposed to be stable. Created to overcome the fluctuations inherent in encrypted currencies. To maintain its stability, stablecoins (1) must be linked to a stable origin and (2) that follows a mechanism that supports wedge.
If stablecoins is linked to gold or electricity, it will reflect the fluctuation of these assets, and therefore it may not be the best if you are looking for an unpopular origin (or close to lack of risk).
Usde maintains a link to US dollar through the hedge of the delta. It uses short and long sites in future contracts, which generate 27 % yield annually – much higher than the annual return of 12 % than other stablecoins associated with US dollars. The derived situations are risky – the higher the risk, the higher the return. Therefore, it includes a risk inherited due to its dependence on derivatives, which contradicts the purpose of stablecoins.
Stablecoins have been present for more than a decade. During this time, there were no large pies in overcoming the case of Terra. The collapse of Terra was not the result of a problem or a backup mechanism, but rather the action of the fraudsters and the manipulation.
Terrausd (UST) had a built -in jury between UST and original Terra Blockchain coin, Luna. To create UST, you need to burn a color.
To tempt merchants to burn Luna and create a UST, creators at Terra Blockchain introduced 19.5 % return on Stokeing, which is 19.5 % interest encryption terms on deposit, through what they called the anchor protocol.
Such a high interest rate is simply not sustainable. Someone must borrow at such a rate or higher for the lender to get a 19.5 % interest. This is the way the banks achieve their profits – they impose a high benefit on borrowing (such as mortgages or loans) and provides low benefit on savings (such as traditional savings calculation or deposit account). An analysis of the anchor protocol in January 2022 showed that it was confused.
One of the allegations in the lawsuits against the founders of Terraform Labs is that the anchor protocol was the Bonzi scheme.
In March 2025, Galaxy Digital reached a settlement of $ 200 million with the New York Prosecutor regarding the claim that the investment company in Crypto promoted Luna digital assets without revealing its interest in the distinctive symbol.
In January 2025, Do Kwon, the founder of Terra, was found responsible for securities fraud and faces multiple fees in the United States, including fraud, fraud in wires and fraud on goods. If the organizers are interested in preventing future cases such as Terra, they must focus on how to deter fraudsters and manipulate the release or engage with Stablecoins.
Decentralization: Reviving Bitcoin hypothesis
Most stablecoins are the guaranteed central assets. It is controlled by a company that can make an unauthorized use of customer money or falsely claims that the precautions that keep the entire again.
To prevent corporate misconduct, organizers must closely monitor these companies and set bases similar to securities laws.
Centrality Stablecoins Run the Blockchain concept and bitcoin hypothesis. When Bitcoin was launched, it was supposed to be an intermediaries -free payment platform, no company, bank, or government – a decentralized mechanism – managed by people for people.
If Stablecoin is central, it should follow the regulations of any other central assets.
Perhaps it is time to revive the bitcoin hypothesis but in a more stable way. The development of a stablecoin decentralization is free from any control of a company, bank or government and reviving the basic idea of Blockchain.
Opinion: Merav Ozair, PhD.
This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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