#USDT stablecoin, the sword of Damocles in the shadows

In the seemingly bright prospect, the hidden reefs of stablecoins have already emerged. From trust crises to systemic risks, each step could trigger a chain reaction.
Behind the prosperity, the lack of reserve transparency has always been a crack in trust.
Despite USDT holding a 70% market share, it has not undergone a comprehensive audit – a 2021 investigation in New York revealed that at certain times it held only 27.6% of the claimed reserves.
The inherent flaws in the algorithmic mechanism have also led to painful lessons. In May 2022, the collapse of TerraUSD (UST) saw its designed "dual-token arbitrage mechanism" plummet from $1 to $0.04 in just five days amid market panic.
More covertly, there are potential conflicts arising from the extension of sovereignty. The cross-border flow of stablecoins is essentially an on-chain expansion of dollar influence. This new type of financial conduit may trigger regulatory arbitrage and currency sovereignty games—especially in the context of the dollar's intention to counter "de-dollarization."
Stablecoins are not only the cost-cutting tool for cross-border payments and the escape ladder from inflation dilemmas, but also regulatory arbitrage tools and new buyers of U.S. debt.
When a stablecoin ecosystem with a market value of 250 billion USD is deeply integrated with tens of millions of transactions daily, constructing a truly transparent and resilient stability mechanism is not only an industry issue but also a key piece of the puzzle for global financial stability.
If private stablecoins eventually dance together with central bank digital currencies, perhaps the very definition of "currency" will be completely rewritten...