- TerraUSD or UST, is an algorithmic stablecoin which was supposed to be pegged to the U.S. dollar. But it lost its dollar peg, collapsed and sent shockwaves through the crypto market.
- Reeve Collins, co-founder of BLOCKv and co-founder of another stablecoin tether, said the terraUSD debacle will "probably be the end" of so-called algorithmic stablecoins.
- The crypto industry also warned that regulation is likely to come for stablecoins as global governments look at the risks in the space.
Luna, the sister cryptocurrency of controversial stablecoin TerraUSD, dropped to $0. The collapse of the algorithmic stablecoin TerraUSD has raised question about the future survival of similar crypto assets.Dan Kitwood | Getty Images News | Getty Images
Algorithmic stablecoins like terraUSD, which collapsed and sent shockwaves through the cryptocurrency market, are unlikely to survive, the co-founder of digital currency tether told CNBC.
Stablecoins are a type of cryptocurrency that is usually pegged to a real-world asset. TerraUSD or UST, is an algorithmic stablecoin which was supposed to be pegged to the U.S. dollar.
Whereas stablecoins like tether and USD Coin are backed by real-world assets such as fiat currencies and government bonds in order to maintain their dollar peg, UST was governed by an algorithm.
UST lost its dollar peg and that also led to a sell-off for its sister token luna, which crashed to $0.