The crash of a stablecoin called Terra and ‘legal’ defrauding of Beanstalk have caused anxiety
On 9 May, the ‘stablecoin’ TerraUSD fell from a high of $119 to around 20 cents. Its digital coin counterpart Luna also fell to near zero. Unlike other cryptocurrencies like Bitcoin that can gyrate wildly in value, stablecoins are pegged to a country’s fiat currency. In most cases, this is the US dollar, and the attempt is to keep the stablecoin’s value pegged at $1. Stablecoins are vital for the crypto world because they are used by traders as a means of retaining value without leaving the digital asset ecosystem. Investors turn to them during periods of crypto volatility.