#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...