New BIS Report: Crypto Stablecoins Fall Short On Redemptions

• The Bank for International Settlements (BIS) report reveals that no current stablecoin can guarantee full parity with its peg at all times.
• Stablecoins are categorized into four types: fiat-backed, crypto-backed, commodity-backed, and unbacked.
• Stablecoins pegged to the US dollar and the euro have generally tracked their pegs more effectively than those pegged to other currencies.
• Only seven fiat-backed stablecoins have managed to keep their deviations from the peg below 1% for more than 97% of their lifespan.
• Tether, the largest stablecoin, has experienced significant deviations from its peg and has barriers to redemption for average users.
• Transparency in the stablecoin market varies, with some issuers disclosing reserve compositions more frequently than others.

The article provides a critical analysis of stablecoins, highlighting their inability to maintain full parity with their pegs and the lack of transparency in the market. It also raises concerns about the stability and reliability of stablecoins.