What happens if a stable coin fails.

[doomloop]

Just a novice question here: what happens if you hold x amount of a stable coin in one of the many lending crypto platforms available (crypto.com, youhodler, nexo, etc) and that coin fails and goes Kaput? Do you loose it all? or are your assets moved to another token or FIAT?

That is why there is so much concern and speculation around the centralized stable coins because they can shut the market anytime they wish and because they have an unlimited supply, it can be easily achieved. I don't think this has happened with any coin but there is a possibility with some coin in the future as more and more stable coins are now making their way which is where it gets dangerous. Like when the ICO market was at its peak, a lot of scam ICO were launched which ultimately killed the whole market.

Solution:
Just buy Bitcoin and HODL. You get way too many gains than those risky defi platforms

Maybe another solution can be to keep USD instead of stable coins in the balance and withdraw to your bank, it might come at a small fees for withdrawal and then again for depositing but it is much safer as compared to buying a stable coin and specially if you are planning to hold for a longer period. If you are planning to hold stable coins for a few weeks or months then there ain't that much risk.

[justdimin]

Many users still have doubts about what kind of stablecoins are generally backed by real dollars. But if there was a real threat to the security of storage, it is unlikely that stable coins in particular USDT would be so popular.

USDT is so popular because it first introduced the concept of stablecoins and hence it has a unique identity and liquidity in the market. It's similar to why despite better coins available there are some other old coins still popular in the market, that is because they arrived first and have a user base which use them and are habitual to it.

I usually trade at Binance and I prefer BUSD over USDT now days, but a trader who doesn't use Binance would always prefer tether USDT because it has better liquidity and trading volume.

I myself quite often use Tether to safely store my assets because its rate is more or less stable and it is backed by the usual US dollar. Although now many are already switching to BUSD, due to the active development of Binance. In general, I think that stable coins are the most reliable currency in terms of rate volatility.

Being reliable is confusing because I rather prefer Bitcoins in terms of reliability as opposed to tether or any stablecoins but in terms of stability, I prefer tether above Bitcoin.

[slaman29]

I usually trade at Binance and I prefer BUSD over USDT now days, but a trader who doesn't use Binance would always prefer tether USDT because it has better liquidity and trading volume.

I see no difference in BUSD or USDT and yes, Tether has a lot more legal issues now but even the regulators know they can't kill it, as to do so would be to crash the crypto market or at least cause a huge hangover, they will choose to protect consumers first. Or they could not care and go after it, who knows? But the same risk lies for Binance at some point right?

[max6575]

to win as the price rise to the limit of level as the expectation but trader might wants to work following technical strategy as distributing balance on possession to hold different token with returns of tasks of evaluation as to collect difference when price is mature.

[MuffinMaster]

Thats really an interesting question and honestly I have never thought about this until now. Well if stable coin fails then all our holdings in stable coins will gone. But thats very unlikely since stable coins like USDT are very much centralized.

[semobo]

Hi,

Just a novice question here: what happens if you hold x amount of a stable coin in one of the many lending crypto platforms available (crypto.com, youhodler, nexo, etc) and that coin fails and goes Kaput? Do you loose it all? or are your assets moved to another token or FIAT?
 

If it fails then you lose, you are not having any assurance of the stable coin value if they are hacked or exit scammed. But there are decentralized stable coins backed by  ethereum which is not going to lose its value unless the ethereum itself goes to zero.

[Argoo]

Thats really an interesting question and honestly I have never thought about this until now. Well if stable coin fails then all our holdings in stable coins will gone. But thats very unlikely since stable coins like USDT are very much centralized.

Centralizing stablecoins does not save the team that issued the coins from bankruptcy and other similar troubles. Stable coins must be backed by specific currencies or national currencies. However, the state itself does not support the existence of this stablecoin. Moreover, this state may even prohibit the stablecoin team from using its national currency as collateral for any other person. Therefore, if something happens to a stablecoin, all its holders will lose their money invested in it. The risk of losing their money lies with the holders of these stablecoins.

[airdata]

Stablecoin is very important for our portfolio becouse without any stablecoin our fund will not secure. StableCoin always maintain our portfolio, but unfortunately if you see that your stablecoin has scam that mean you lost your all money.