Lessons from the Collapse of FTX and TerraUSD

Stablecoins -- crypto-tokens whose value is pegged to fiat currencies -- aim to blend the stability of traditional government-issued money with the speed, decentralized nature, and reach of cryptocurrencies. They were created as an alternative to cryptocurrencies whose volatile prices make them impractical for purchases or for holding wealth. Stablecoins are increasingly used in transactions, remittances, and as a way to preserve wealth in high-inflation economies. What are the potential benefits and risks of widespread adoption of stablecoins? And what are governments in the U.S. and other countries doing to mitigate those risks, as well as to promote the use of stablecoins? Udaibir Das joins EconoFact Chats to discuss these questions. Udaibir is a Distinguished Fellow at the Observer Research Foundation, America.