The resiliency of stablecoins and whether they’re backed by a reliable pile of money is a contentious one in the cryptocurrency industry. Stablecoins are meant to closely track the value of something else, often the U.S. dollar. So if investors have put, say, $10 billion into a stablecoin, there should, in theory, be $10 billion sitting somewhere to back it up. The largest stablecoin, Tether’s USDT, has been dogged for years by concern that it has not been fully backed. In 2021, Tether was forced to pay $18.5 million in penalties after New York state found that it had falsely claimed that its stablecoins were fully backed 1-to-1 by U.S. dollars.
