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Jul 23, 2022 - Economy

5. Stablecoins look stable after one big collapse

Market cap of top five stablecoins
Data: Messari; Note: Top five stablecoins as of April 1, 2022; Chart: Simran Parwani/Axios

Stablecoins are designed to be, you know, stable. Yet one algorithmically-backed version from Terra proved to be rather unstable, and it shook the crypto market as a whole.

Why it matters: The emerging asset class is being increasingly used as an on-ramp into crypto. Because of this, central banks and governments around the world are expressing concern that stablecoins, which can be vulnerable to runs, pose financial risks.

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