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What Are Stablecoins? Why Did TerraUSD Collapse?: QuickTake

July 6, 2022, 7:18 AM

If you put a dollar bill under your mattress, you know you’ll get a dollar bill back when you go looking for it. And that paper currency will still be worth $1. A branch of cryptocurrencies called stablecoins aims to replicate that kind of dependability in totally new ways. Some issuers say they keep stores of assets as collateral to guarantee the value of their stablecoins. Other versions involve more complex arrangements. One of those, TerraUSD, and its sister token Luna melted down in spectacular fashion in May, sending their combined market value of $60 billion to near zero. The ...