“And a lot of people pulled out their money in the last few months, because they realized that it wasn’t sustainable. So that crash kind of had a cascade effect. And it will probably be the end of most algo stablecoins.”
Collins is also the co-founder of tether a non-algorithmic stablecoin. Tether’s developers claim that it is backed by cash, U.S. Treasurys, and corporate bonds. In the crypto market turmoil last month, tether also briefly lost its dollar peg before regaining it.
Jeremy Allaire, CEO of Circle, one of the companies behind the issuance of the USDC stablecoin, said he thinks people will continue to work on algorithmic stablecoins.
“I’ve compared algorithmic stable coins to the Fountain of Youth or the Holy Grail. Others have referred to it as financial alchemy. And so there will continue to be financial alchemists who, who work on the magic potion to create these things and to find … the Holy Grail of a stable value, algorithmic digital currency. So I fully expect continued pursuit of that,” Allaire told CNBC last week.
