Stablecoins, such as tether and USDC, are cryptocurrency tokens tied to a basket of assets meant to “peg” each token’s value to a stable currency, such as U.S. dollars. By far the most worrisome element of stablecoins is that the assets backing them are not subject to consistent oversight, raising serious concerns about their quality and, yes, stability. In the event of a broad market downturn, a supposed stablecoin backed by fragile instruments could instead lose value rapidly in the crypto equivalent of a bank run.

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