Stablecoins Exposed: Dollar's Volatility Reveal

The recent dollar/yen panic serves as a stark reminder that stablecoins are far from being a reliable hedge against currency volatility. Despite their promoters' claims, these supposedly 'stable' cryptocurrencies derive their value from a strict peg to the US dollar, which is itself a volatile and unpredictable asset.

The current exchange rate of 159 yen per dollar is a far cry from the 75 yen it was worth in 2011, highlighting the yen's decline. However, this narrative conveniently glosses over the fact that the US dollar was also much weaker back then, buying only 360 yen in 1971 when it was still linked to gold.

The severing of the dollar's link to gold in 1971 led to its instability and volatility, with currency trading proliferating and becoming a massive $7 trillion industry. The yen, on the other hand, has been rising steadily since then, reflecting the dollar's weakness.

Crypto exchanges and warehouses continue to tout stablecoins as a safe haven, but this narrative is far from accurate. They are urging legislators to grant them bank-like status based on these 'stable' coins, which are anything but.