The Hidden Risk of Dollar-Pegged Stablecoins

[madtrader]

Today, around 95% of all stablecoins are pegged to the US dollar, a design choice that Vitalik Buterin believes is risky over the long run. While dollar tracking may work in the short term, tying crypto stability to a single nation-state exposes users to inflation, monetary policy shifts, and geopolitical uncertainty.

Buterin argues that decentralized stablecoins should instead track a more resilient economic index. Over a 20-year horizon, even moderate inflation could erode trust in dollar-pegged assets, making survivability — not convenience — the real challenge for next-generation stablecoin design.

[nihalsari]

dollar pegs are convenient now but yeah long term survivability is the real test