The Problem With Stablecoins

The only way for the companies to make good on these redemption promises is that they have to hold reserves sufficient to make it good on them. The largest stablecoin companies often not held assets sufficient to meet the redemption demand of their customers despite what they say to the public, etc. It's essentially just a question of fraud, representations, market discipline, etc. But of course, the individuals, the customers, there's very little ability for them to really interrogate the inner workings of these firms and see whether or not buying stablecoins from this one as opposed to that one is a good deal.