Collins said the fall of TerraUSD didn't surprise him. However, the crash of the TerraUSD algorithmic stablecoin has raised questions about the future viability of such cryptocurrencies. Tether co-founder Reeve Collins believes the collapse of UST could be the end of most, if not all, algorithmic stablecoins. According to him, other algorithmically stable coins could soon follow UST, eventually ending its appearance.
"It's a shame the money... lost, but that's not surprising. It's a solid coin backed by algorithms, so it's just a bunch of smart people trying to figure out how to make something." it can be tied to the dollar," he told Collins with news.
"…many people have withdrawn their money in recent months because they realized it was not sustainable. So this collapse has a cascading effect. And that will likely be the end of most seaweed stablecoins," he added.
While stablecoins like Tether and USD Coin are backed by real-world assets like fiat currency and government bonds to maintain their peg to the dollar, UST is algorithm-driven.
Meanwhile, Jeremy Aller, CEO of Circle, one of the companies behind the issuance of the USDC stablecoin, said he believes people will continue to work on algorithmic stablecoins.
"I've compared algorithmic stablecoins to the Fountain of Youth or the Holy Grail." Others call it financial alchemy. And there will continue to be financial alchemists working the magic potion to create these things and...finding the Holy Grail with stable value, algorithmic digital currency. So I assume the chase will continue," Aller told news.
