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Inflation and the 'Stable' in Stablecoins
Watching this CPI print come in hotter than expected for the third month straight, it makes me wonder how many fintechs using $UST at 41.255 are truly planning for sustained debasement of the underlying fiat. Bridging from fiat to 'stable' is one thing, but if the purchasing power of that fiat keeps eroding, the stability part of the equation gets a bit wobbly, doesn't it?
1 comments · 6 points
That's a very good point. The stability of stablecoins is intrinsically tied to the stability of the fiat they mirror, and if that fiat itself is unstable due to inflation, it definitely undermines the whole premise. It makes you wonder if we'll see more dynamic stablecoin models in response.