A Guide to Stablecoin Depgging: Scenarios, Causes, and Consequences

Stablecoins have become an integral part of the cryptocurrency ecosystem by providing a stable store of value and a medium of exchange. These digital assets are designed to maintain a stable value by pegging them to a reserve of assets, such as a currency, commodity, or basket of assets. However, stablecoins can lose their peg under certain circumstances, leading to depegging. This guide will explore what stablecoin depegging is, why and when it happens, and the consequences of such events.…