Reeve Collins: UST Collapse Could Be the End for All Algorithmic Stablecoins – Bits Media

Co-founder of the cryptocurrency company BLOCKv Reeve Collins expressed his opinion, that the fall of UST and the subsequent collapse of the Terra ecosystem could be the end for all algorithmic stablecoins.

During a conversation with CNBC reporters at the Davos Economic Forum, Rive Collins (Reeve Collins) noted, that the decoupling of the UST exchange rate from the US dollar exchange rate was quite expected:

“It turned out very poorly and the money was lost, although it's not that much of a surprise. This is a stablecoin based on an algorithm. In fact, just a bunch of smart people trying to figure out a way to peg something to the US dollar. Many investors have withdrawn funds in recent months - they realized, that the asset is not reliable. So the fall became cascading. AND, perhaps, This will be the end for most algorithmic stablecoins.".

Circle CEO Jeremy Allaire (Jeremy allaire) did not support this point of view. He stressed, that people will continue to work on algorithmic stablecoins. but, It’s still worth waiting for the regulators’ reaction.

“I would compare algorithmic stablecoins to the Holy Grail. Others compare them to alchemy. And there will always be financial alchemists, which will create various potions, turn lead into gold, trying to find the formula for a stable algorithmic digital currency. I am completely confident in this.", – Allair emphasized.

Note, that the collapse of UST and Terra has attracted significant attention from regulators around the world. So, The Basel Committee is preparing a new version of its recommendations for regulating cryptocurrencies, and South Korea is forming a special Digital Assets Committee.