Stablecoins Fail to Maintain Peg Consistently, Says Bank for International Settlements Report

According to CoinDesk, economists and analysts at the Bank for International Settlements (BIS) have stated in a report that stablecoins do not consistently maintain their peg to assets like the U.S. dollar. The report assessed various stablecoins, including Pax Gold, USD Coin, and Tether, and found that none of them consistently maintained their closing prices in parity with their peg. The report also referenced the collapse of Terra's algorithmic stablecoin UST, which caused significant losses in the crypto market last year. The BIS report highlighted that stablecoins must maintain their peg during the day to serve as a medium of exchange, but this does not happen consistently enough. The lack of transparency regarding the availability and quality of reserves may undermine trust in stablecoins' credibility and their ability to maintain their peg. Additionally, Moody's Analytics released an article on Monday stating that fiat-backed stablecoins depegged and lost their par with the asset they were pegged to at least 609 times this year alone.