Dogecoin insider Michaboa sent an open letter to the community, advising them to avoid stablecoins like USDT, USDC, and even PYUSD. He said holding these assets was “inherently risky” and could harm the holder.
For stable coins, Bitcoin, Litecoin, Dogecoin
According to a post shared on X, Mishaboar pointed out that these stablecoins are dangerous for a number of reasons. First, he said there is always the possibility that underlying or reserve assets could collapse. This is probably one of the most controversial topics in the industry.
In addition to the issue of reserve collapse, Dogecoin officials pointed out that these stablecoins are highly centralized. He specifically cited the industry’s biggest players, USDT and USDC. Paypal’s stablecoin PYUSD is also gaining momentum and he added it to the list. He claimed that entities behind assets such as Tether, Circle, and PayPal could freeze users’ assets if requested.
dear #Dogecoinas I have repeated countless times,
Holding “stable” coins like USDT, USDC, and PYUSD is inherently risky. It’s not just the catastrophic collapse of their house in the sand and the institutions that support them (which always happens).
They are risk assets…
— Mishaboar (@mishaboar) October 25, 2024
Despite the role of stablecoins in the market, Mishabois believes it is better to hold Bitcoin, Dogecoin, Litecoin, and Monero. He argued that, while provocative, Monero is far less risky overall. Contrary to the core position of most cryptocurrency proponents, Mishabois also advocated holding fiat currencies with real value. Comparatively, he believes this is relatively safe.
Will stablecoin regulations help?
Some of the concerns expressed by Dogecoin supporters can be addressed primarily through regulation. Notably, Tether CEO Paolo Ardoino has called for stablecoin regulation in the US, citing the lack of a reliable framework yet.
Centralization risks can also be addressed by applying appropriate rules. So far, regions of the European Union have introduced Markets In Crypto Assets (MiCA) to support the issuance of stablecoins.
The collapse of the Terra-linked algorithmic stablecoin USTC highlights Mishaboar’s concerns. With more than $40 billion wiped from the market, regulators around the world are now working to prevent it from happening again. Earlier this year, US regulators announced regulations banning algorithmic stablecoins.
Advocates say some of these issues could be better addressed if the industry worked together.
Read more: Breaking news: US Department of Justice begins investigation into Tether
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godfrey benjamin
Benjamin Godfrey is a blockchain enthusiast and journalist who enjoys writing about the real-world applications of blockchain technology and the innovations driving public acceptance and global integration of emerging technologies. His desire to educate people about cryptocurrencies has inspired his contributions to well-known blockchain-based media and sites. Benjamin Godfrey loves sports and farming. X, Follow him on Linkedin
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
