A closer look
The backbone of the supposedly revolutionary cryptocurrency ecosystem is backed by the exact same opaque accounting tricks that caused the 2008 financial crisis. Stablecoins are advertised as digital tokens securely backed 1-to-1 by physical US dollars in a vault. In reality, to maximize corporate profits, issuers like Tether quietly invested billions of those backing reserves into risky, yield-bearing commercial paper and foreign corporate debt. If too many users attempt to cash out at once, the illusion shatters into a catastrophic bank run.
