國際清算銀行+2022+年年度經(jīng)濟(jì)報(bào)告的特別章節(jié)-未來的貨幣體系

KeyKeytakeaways?Aburstofcreativeinnovationisunderwayinmoneyandpayments,openingupvistasofafuturedigitalmonetarysystemthatadaptscontinuouslytoservethepublicinterest.?Structuralflawsmakethecryptouniverseunsuitableasthebasisforamonetarysystem:itlacksastablenominalanchor,whilelimitstoitsscalabilityresultinfragmentation.Contrarytothedecentralisationnarrative,cryptooftenreliesonunregulatedintermediariesthatposefinancialrisks.?Asystemgroundedincentralbankmoneyoffersasounderbasisforinnovation,ensuringthatservicesarestableandinteroperable,domesticallyandacrossborders.Suchasystemcansustainavirtuouscircleoftrustandadaptabilitythroughnetworkeffects.?Newcapabilitiessuchasprogrammability,composabilityandtokenisationarenotthepreserveofcrypto,butcaninsteadbebuiltontopofcentralbankdigitalcurrencies(CBDCs),fastpaymentsystemsandassociateddataarchitectures.Everyday,peoplearoundtheworldmakemorethan2billiondigitalpayments.1Theypayforgoodsandservices,borrowandsaveandengageinamultitudeoffinancialtransactions.Everytimetheydoso,theyrelyonthemonetarysystem–thesetofinstitutionsandarrangementsthatsurroundandsupportmonetaryexchange.Attheheartofthemonetarysystemstandsthecentralbank.Asthecentralbankissuesmoneyandmaintainsitscorefunctions,trustinthemonetarysystemisultimatelygroundedintrustinthecentralbank.However,thecentralbankdoesnotoperateinisolation.Commercialbanksandotherprivatepaymentserviceproviders(PSPs)executethevastmajorityofpaymentsandoffercustomer-facingservices.Thisdivisionofrolespromotescompetitionandgivesfullplaytotheingenuityandcreativityoftheprivatesectorinservingcustomers.Indeed,privatesectorinnovationbenefitssocietypreciselybecauseitisbuiltonthestrongfoundationsofthecentralbank.Themonetarysystemwiththecentralbankatitscentrehasservedsocietywell.Yetdigitalinnovationisexpandingthefrontieroftechnologicalpossibilities,placingnewdemandsonthesystem.Far-reachinginnovations,suchasthoseinthecryptouniverse,entailaradicaldeparture.Thecryptouniversebuildsonthepremiseofdecentralisation.Ratherthanrelyingoncentralbankmoneyandtrustedintermediaries,cryptoenvisageschecksandbalancesprovidedbyamultitudeofanonymousvalidatorssoastokeepthesystemself-sustainingandfreefromtheinfluenceofpowerfulentitiesorgroups.Decentralisedfinance,or“DeFi”,seekstoreplicateconventionalfinancialserviceswithinthecryptouniverse.Theseservicesareenabledbyinnovationssuchasprogrammabilityandcomposability(seeglossary)onpermissionlessblockchains.Suchsystemsare“alwayson”,allowingforglobaltransactions24/7,basedonopen-sourcecodeandknowingnoborders.BISAnnualEconomicReport20227576BISAnnualEconomicReport2022However,recenteventshaverevealedavastgulfbetweenthecryptovisionanditsreality.TheimplosionoftheTerraUSDstablecoinandthecollapseofitstwincoinLunahaveunderscoredtheweaknessofasystemthatissustainedbysellingcoinsforspeculation.Inaddition,itisnowbecomingclearthatcryptoandDeFihavedeeperstructurallimitationsthatpreventthemfromachievingthelevelsofefficiency,stabilityorintegrityrequiredforanadequatemonetarysystem.Inparticular,thecryptouniverselacksanominalanchor,whichittriestoimport,imperfectly,throughstablecoins.Itisalsopronetofragmentation,anditsapplicationscannotscalewithoutcompromisingsecurity,asshownbytheircongestionandexorbitantfees.Activityinthisparallelsystemis,instead,sustainedbytheinfluxofspeculativecoinholders.Finally,thereareseriousconcernsabouttheroleofunregulatedintermediariesinthesystem.Astheyaredeep-seated,thesestructuralshortcomingsareunlikelytobeamenabletotechnicalfixesalone.Thisisbecausetheyreflecttheinherentlimitationsofadecentralisedsystembuiltonpermissionlessblockchains.Thischaptersetsoutanalternativevisionforthefuture,onethatbuildsoncentralbankpublicgoods.Thiswillensurethatinnovativeprivatesectorservicesaresecurelyrootedinthetrustprovidedbycentralbankmoney.Scalingonthebackofnetworkeffects,centralbankdigitalcurrencies(CBDCs)andretailfastpaymentsystems(FPS)arewellplacedtoservethepublicinterestthroughgreaterconvenienceandlowercosts,whilemaintainingthesystem’sintegrity.Decentralisationandpermissioneddistributedledgertechnology(DLT)canalsoplayaconstructiverole,egwhencentralbanksworktogetherinmulti-CBDCarrangements.Theseinnovativepaymentrailsarefullycompatiblewithprogrammability,composabilityandtokenisationtosupportfaster,saferandcheaperpaymentsandsettlement,bothwithinandacrossborders.Inthisway,thefuturemonetarysystemwillbeadaptable,allowingprivatesectorinnovationtoflourishwhileavoidingthedrawbacksofcrypto.Suchinitiativescouldopenupanewchapterintheglobalmonetarysystem.Thischapterisorganisedasfollows.Tosetthestage,itfirstdescribestoday’smonetarysystemandthehigh-levelobjectivesitneedstoachieve,andtowhatextentchangesintechnologyandtheeconomicenvironmenthaveopeneduproomforimprovement.ThenextsectiondiscussesthepromiseandpitfallsofcryptoandDeFiinnovations.Thechapterthendiscussesavisionforthefuturemonetarysystem,builtoncentralbankpublicgoods.Thefinalsectionconcludes.wewantfromamonetarysystemThemonetarysystemisthesetofinstitutionsandarrangementsthatsupportsmonetaryexchange.Itconsistsofmoneyandpaymentsystems.2Whatisrequiredfromsuchasystemtoservesociety?Whilethereisnocanonicallistofnecessaryfeatures,anumberofhigh-levelgoalsstandout(Table1,firstcolumn).Toensurethesafetyandstabilityofthesystem,moneyneedstofulfilthreefunctions:asastoreofvalue,aunitofaccountandamediumofexchange.Wherethemonetarysystemreliesonkeynodesorentities(whetherpublicorprivate),theyneedtobeaccountable,throughspecificmandatesforpublicauthoritiesandthroughproperregulationandsupervisionforprivateentities.Themonetarysystemshouldbeefficient,enablingreliable,fastpaymentstosupporteconomictransactionsbothatscaleandalsoatlowcost.Accesstobasicpaymentsservicesataffordableprices,inparticulartransactionaccounts,shouldbeuniversaltospreadthebenefitsofeconomicactivity,promotingfinancialinclusion.Notleast,thesystemmustprotectprivacyasafundamentalright,andprovideusercontroloverlsofthemonetarysystemlesodaysmonetaryouniversevisionndstabilityoneyneedstoperformundamentalfunctionsasastoreofvalue,unitofaccountandmediumofexchangegncurrenciescanrpricestabilityandblicoversighthashelpedievesafeandrobustntsystemsptocurrenciesdonotmmoneysfundamentalfunctionsandstablecoinsneedtoimporteircredibilityoundedintrustinthecentralbankaturestablesovereignemsountabilitypublicsandregulationnsurethatkeynodesthesystemareaccountablendtransparenttousersandionregulationandversighttacklerisksromotecompetitionandprotectconsumersbutpublicmandatesmayneedtoadapttochangeptoandDeFicreateaallelfinancialsystemtomventregulationwithoaccountabilitytothepublicmandatesandoastoharnessonandstimulateyiencythesystemuldprovidelowcostfasttsandthroughputtsareenexpensiveandnancialinstitutionscollectdrentstlytransactionsspeculativeesstemscancostsandrentssupportingnomicactivity.Inclusion–thesystemdensureuniversalaccesstobasicservicesataffordablecesackaccesstoansactionaccountsandptoandDeFihavenotyetservedtoenhanceinancialinclusionovidersandaddressrstoinclusionandervetheunbankedontroloverdataernancearrangementsontroloverdataepdatasafebuttheydovesufficientcontrolheirdataTransactionsarepublicontheblockchainwhichwillnotworkwith“realnames”tecturescaneusersprivacyandrolovertheirdatantegritythesystemshouldavoidillicitactivitysuchoneylaunderingfinancingrorismandfraudsarejecttoextensiveregulationbutillicitactivityityispronetheDeFisectorisrifewithfraudandtheft;identificationisneedediescanhelpbetterpreventillicitctivityandimproveondayssystemsdaptabilitythesystemdanticipatefuturesdfostercompetitionandnsareadaptingtodemands,butarenotyetatthehnologicalfrontieryomposabilityandtokenisationgivescopeforwfunctionsyomposabilityandtokenisationcanbeofferedinaCBDCorthrougheniseddepositsennessthesystemwforseamlessorderuseesscrossrpaymentsarestillborderlessdallowsglobaltransactionsbutwithoutequateoversighttstherreformsmeanheaperfasterandsaferordertransactionsGreendenotesthatapolicygoalisbroadlyfulfilledyellowthatthereisroomforimprovementandredthatitisnotgenerallyfulfilled.SourceBIS.financialdata.Theintegrityofthesystemmustbeprotected,byguardingagainstillicitactivitysuchasmoneylaundering,financingofterrorismandfraud.Themonetarysystemisnotjustasnapshotoftheeconomyasitexiststoday;itneedstoevolvewithstructuralchangesintheeconomyandsociety.Forthisreason,themeansofreachingthehigh-levelgoalssetoutinTable1shouldevolvewiththemonetarysystemitselfandthetechnologyunderpinningit.Inshort,themonetarysystemmustbeadaptable:itshouldanticipatefuturedevelopmentsanduserneeds.Itmustbeattunedtotechnologicaldevelopmentsandrespondtothechangingdemandsofhouseholdsandbusinesses,anditmustfostercompetitionandinnovation.Tobetterserveanincreasinglyinterconnectedworld,themonetaryBISAnnualEconomicReport27778BISAnnualEconomicReport2022systemalsoneedstobeopen,interoperableandflexible,bothdomesticallyandacrossborders.Justaseconomictransactionstranscendborders,themonetarysystemwillneedtoserveaseamlesswebofinterconnectedentities,ratherthansparselyconnectedislandsofactivity.Today’smonetarysystemhascomesomewaytowardsthesehigh-levelgoals,butthereisstillsomewaytogo.Changesinusers’needsandtheconcomitantshiftsintechnologyhavepointedtoareasforimprovement(Table1,secondcolumn).Currentpaymentservicescansometimesbecumbersomeandcostlytouse,inpartreflectingalackofcompetition.Cross-borderpaymentsareparticularlyexpensive,opaqueandslow:theyusuallyinvolveoneormorecorrespondentbankstosettleatransaction,usingledgersbuiltondifferenttechnologies.3Inaddition,alargeshareofadults,especiallyinemergingmarketanddevelopingeconomies,stillhavenoaccesstodigitalpaymentoptions.Butaglobalisedworldthatfeaturesanever-growingdigitaleconomyrequiresamonetarysystemthatallowseveryonetomakefinancialtransactionsdomesticallyandgloballyinasafe,soundandefficientway.Cateringtothesechangesinthedemandsthatsocietyplacesinthemonetarysystemcallsforadvancesintechnologyandinstitutionalarrangements.pitfallsofcryptoThecryptouniverseisinturmoil.TheimplosionoftheTerraUSDstablecoinanditstwincoinLunaisonlythemostspectacularfailureinthesector,withmanylesser-knowncoinshavingseenacollapseinpriceofmorethan90%relativetotheirpeakin2021.Cryptocommentatorshavebeguntorefertorecenteventsasthestartofa“cryptowinter”.Asdramaticastheserecentpricecollapseshavebeen,focusingonthepriceactionalonedivertsattentionawayfromthedeeperstructuralflawsincryptothatrenderthemunsuitableasthebasisforamonetarysystemthatservessociety(Table1,thirdcolumn).Theprevalenceofstablecoins,whichattempttopegtheirvaluetotheUSdollarorotherconventionalcurrencies,indicatesthepervasiveneedinthecryptosectortopiggybackonthecredibilityprovidedbytheunitofaccountissuedbythecentralbank.Inthissense,stablecoinsarethemanifestationofcrypto’ssearchforanominalanchor.Stablecoinsresemblethewaythatacurrencypegisanominalanchorforthevalueofanationalcurrencyagainstthatofaninternationalcurrency–butwithouttheinstitutionalarrangements,instruments,commitmentsandcredibilityofthecentralbankoperatingthepeg.Providingtheunitofaccountfortheeconomyistheprimaryroleofthecentralbank.Thefactthatstablecoinsmustimportthecredibilityofcentralbankmoneyishighlyrevealingofcrypto’sstructuralshortcomings.Thatstablecoinsareoftenlessstablethantheirissuersclaimshowsthattheyareatbestanimperfectsubstituteforsoundsovereigncurrency.Stablecoinsalsoplayakeyroleinfacilitatingtransactionsacrosstheplethoraofcryptocurrenciesthathavemushroomedinrecentyears.Atthelatestcounttherewereover10,000coinsonmanydifferentblockchainsthatcompetedfortheattentionofspeculativebuyers.Theproliferationofcoinsrevealsanotherimportantstructuralflawwithcrypto–namelythefragmentationofthecryptouniverse,withmanyincompatiblesettlementlayersjostlingforaplaceinthespotlight.Thisfragmentationofthecryptouniverseraisesseriousquestionsastothesuitabilityofcryptoasmoney.Moneyisacoordinationdevicethatservessocietythroughitsstrongnetworkeffects.Themoreusersflocktoaparticularformofmoney,themoreusersitattracts.Forthisreason,moneyhasthe“winnertakesall”property,inwhichnetworkeffectsleadtothedominanceofoneversionofmoneyasthetransactionsmediumthatisgenerallyacceptedthroughouttheeconomy.Thefragmentationofthecryptouniversepointsinaverydifferentdirection:asexplainedbelow,themoreusersflocktooneblockchainsystem,theworseisthecongestionandthehigherarethetransactionfees,openingthedoortotheentryofnewerrivalswhomaycutcornersonsecurityinfavourofhighercapacity.So,ratherthanthefamiliarmonetarynarrativeof“themorethemerrier”,cryptodisplaysthepropertyof“themorethesorrier”.Itisthistendencytowardfragmentationthatisperhapscrypto’sgreatestflawasthebasisforamonetarysystem.Nevertheless,cryptooffersaglimpseofpotentiallyusefulfeaturesthatcouldenhancethecapabilitiesofthecurrentmonetarysystem.Thesestemfromthecapacitytocombinetransactionsandtoexecutetheautomaticsettlementofbundledtransactionsinaconditionalmanner,enablinggreaterfunctionalityandspeed.Thus,onequestiontoconsiderishowtheusefulfunctionalitiesofcryptocanbeincorporatedinafuturemonetarysystemthatbuildsoncentralbankmoney.Inordertodevelopthedeeperinsightsontheflawsandpossibilitiesofcrypto,itisinstructivefirsttoexplainsomebasicbuildingblocksofthecryptoworld.ebuildingblocksofcryptoCryptopurportstoreducetheheftofintermediariesandhasbeendescribedasabroadermovementtowarddecentralisedfinanceandevenamoredecentralisedinternet(“Web3.0”or“Web3”).Thetoutedbenefitistodemocratisefinance,grantingusersgreatercontrolovertheirdata.Priortotherecentcrash,themarketsizeofcryptocurrenciesandDeFihadexpandedrapidly(Graph1).CryptohasitsorigininBitcoin,whichintroducedaradicalidea:adecentralisedmeansoftransferringvalueonapermissionlessblockchain.Anyparticipantcanactasavalidatingnode(seeglossary)andtakepartinthevalidationoftransactionsonapublicledger(iethepermissionlessblockchain).RatherthanrelyingontrustedMarketsizeofcryptocurrenciesandDeFi1Graph1ARapidgrowthincryptoandDeFiB.…followedbyacollapseUSDtrnUSDbnUSDtrnUSDbn2.52502.5a2.0200.01.5150.51.01000.00Q320Q420Q121Q221Q321Q421Q122StablecoinsOthersDeFicoinsAprMay2022Totalvaluelocked(rhs):DeFiMarketcap(lhs):BitcoinEtheraTerraUSDandLunacollapsestartingon9May2022.1Seetechnicalannexfordetails.SourcesCoinGecko;DefiLlama;BIS.BISAnnualEconomicReport20227980BISAnnualEconomicReport2022intermediaries(suchasbanks),record-keepingontheblockchainisperformedbyamultitudeofanonymous,self-interestedvalidators.Transactionswithcryptocurrenciesareverifiedbydecentralisedvalidatorsandrecordedonthepublicledger.Ifasellerwantstotransfercryptocurrenciestoabuyer,thebuyer(whoseidentityishiddenbehindtheircryptographicdigitalsignature)broadcaststhetransactiondetails,egtransactingparties,amountorfees.Validators(insomenetworkscalled“miners”)competetoverifythetransaction,andwhoeverisselectedtoverifythenappendsthetransactiontotheblockchain.Theupdatedblockchainisthensharedamongallminersandusers.Thehistoryofalltransactionsishencepubliclyobservableandtiedtospecificwallets,whilethetrueidentitiesofthepartiesbehindtransactions(ietheownersofthewallets)remainundisclosed.Bybroadcastingallinformationpublicly,thesystemverifiesthatthetransactionisconsistentwiththehistoryoftransfersontheblockchain,iethatthecryptocurrencyactuallybelongstothesellerandhasnotbeendouble-spent.However,foradecentralisedgovernancesystem,economicincentivesarekey.Thelimitsofthesystemaresetbythelawsofeconomicsratherthanthelawsofphysics.Inotherwords,notonlythetechnologybutalsotheincentivesneedtowork.Miners(orvalidators)arecompensatedwithmonetaryrewardsforperformingtheirtasksaccordingtotherulessothatthesystembecomesself-sustaining.Rewards,paidincrypto,cancomeintheformoftransactionfeesbutcanalsostemfromrentsthataccrueto“staking”one’scoinsinaproof-of-stakeblockchain.Thelargerthestake,themoreoftenanodewillserveasvalidator,andthelargertherents.SincetheadventofBitcoinin2009,manyotherblockchainsandassociatedcryptocoinshaveenteredthescene,mostnotablyEthereum,whichprovidesfortheuseof“smartcontracts”and“programmability”(seeglossary).Smartcontracts,orself-executingcodethattriggersanactionifsomepre-specifiedconditionsaremet,canautomatemarketfunctionsandobviatetheintermediariesthatweretraditionallyrequiredtomakedecisions.Astheunderlyingcodeispubliclyavailable,itcanbescrutinised,makingsmartcontractstransparentandreducingtheriskofmanipulation.Animportantfeatureofsmartcontractsistheircomposability,orthecapacitytocombinedifferentcomponentsinasystem.Userscanperformcomplextransactionsonthesameblockchainbycombiningmultipleinstructionswithinonesinglesmartcontract–“moneylegos”.Theycancreateadigitalrepresentationofassetsthrough“tokenisation”(seeglossary).Assmartcontractscannotdirectlyaccessinformationthatresides“off-chain”,ieoutsidethespecificblockchain,theyrequiremediatorstoprovidesuchdata(so-calledoracles).4Newerblockchains,withTerra(beforeitscollapse)beingaprominentexample,havebeentoutedas“Ethereumkillers”inthattheyboasthighercapacityandlargerthroughput(seeglossary).However,thesechangesbringnewproblems.Capacityisoftenincreasedthroughgreatercentralisationinthevalidationmechanisms,weakeningsecurityandconcentratingthebenefitsforinsiders,asexplainedbelow.5Akeydevelopmentinthecryptouniverseistheriseofdecentralisedfinance,or“DeFi”.DeFioffersfinancialserviceandproducts,butwiththedeclaredobjectiveofrefashioningthefinancialsystembycuttingoutthemiddlemenandtherebyloweringcosts.6Tothisend,DeFiapplicationspubliclyrecordpseudo-anonymoustransactionsincryptocurrenciesonpermissionlessblockchains.“Decentralisedapplications”(dApps)featuringsmartcontractsallowtransactionstobeautomated.Toreachconsensus,validatorsareincentivisedthroughrewards.WhiletheDeFiecosystemisevolvingrapidly,themaintypesoffinancialactivitycontinuetobethosealreadyavailableintraditionalfinance,suchaslending,BISAnnualEconomicReport281tradingandinsurance.7Lendingplatformsletuserslendouttheirstablecoinswithinteresttoborrowersthatpostothercryptocurrenciesascollateral.Decentralisedexchanges(DEXs)representmarketplaceswheretransactionsoccurdirectlybetweencryptocurrencyorstablecointraders,withpricesdeterminedviaalgorithms.OnDeFiinsuranceplatforms,userscaninsurethemselvesagainstegthemishandlingofprivatekeys,exchangehacksorsmartcontractfailures.Asactivitiesalmostexclusivelyinvolveexchangingonestablecoinorcryptocurrencyforanother,anddonotfinanceproductiveinvestmentsintherealeconomy,thesystemismostlyself-referential.StablecoinsplayakeyroleintheDeFiecosystem.Theseareso-calledbecausetheyareusuallypeggedtoanumeraire,suchastheUSdollar,butcanalsotargetthepriceofothercurrenciesorassets(eggold).Inthissense,theyoftenimportthecredibilityprovidedbytheunitofaccountissuedbythecentralbank.Theirmainusecaseistoovercomethehighpricevolatilityandlowliquidityofunbackedcryptocurrencies,likeBitcoin.Theirusealsoavoidsfrequentconversionbetweencryptocurrenciesandbankdepositsinsovereigncurrency,whichisusuallyassociatedwithsignificantfees.BecausestablecoinsareusedtosupportawiderangeofDeFiactivities,turnoverinstablecoinsgenerallydwarfsthatofothercryptocurrencies.Thetwomaintypesofstablecoinareasset-backedandalgorithmic.Asset-backedstablecoins,suchasTether,USDCoinandBinanceUSD,aretypicallymanagedbyacentralisedintermediarywhoinveststheunderlyingcollateralandcoordinatesthecoins’redemptionandcreation.Assetscanbeheldingovernmentbonds,short-termcorporatedebtorbankdeposits,orinothercryptocurrencies.Incontrast,algorithmicstablecoins,suchasTerraUSDbeforeitsimplosion,relyoncomplexalgorithmsthatautomaticallyrebalancesupplytomaintaintheirvaluerelativetothetargetcurrencyorasset.Toavoidrelianceonfiatcurrency,theyoftendosobyprovidinguserswithanarbitrageopportunityrelativetoanothercryptocurrency.Despitetheirname,stablecoins–inparticular,algorithmicones–arelessstablethantheirissuersclaim.InMay2022,TerraUSDenteredadeathspiral,asitsvaluedroppedfrom$1tojustafewcentsoverthecourseofafewdays(seeBoxA).Intheaftermath,otheralgorithmicstablecoinscameunderpressure.Butsodidsomeasset-backedstablecoins,whichhaveseenlarge-scaleredemptions,temporarilylosingtheirpeginthewakeoftheshock.Redemptionsweremorepronouncedamongstablecoinswhoseissuersdidnotdisclosethecompositionofreserveassetsindetail,presumablyreflectinginvestors’worriesthatsuchissuersmightnotbeabletoguaranteeconversionatpar.Indeed,commentatorshavewarnedforsometimethatthereisaninherentconflictofinterestinstablecoins,withanincentiveforissuerstoinvestinriskierassets.Economichistoryislitteredwithattemptsatprivatemoneythatfailed,leadingtolossesforinvestorsandtherealeconomy.Therobustnessofstablecoinstabilisationmechanismsdependscruciallyonthequalityandtransparencyoftheirreserveassets,whichareoftenwoefullylacking.8Yetevenifstablecoinsweretoremainstabletosomeextent,theylackthequalitiesnecessarytounderpinthefuturemonetarysystem.Theymustimporttheircredibilityfromsovereignfiatcurrencies,buttheybenefitneitherfromtheregulatoryrequirementsandprotectionsofbankdepositsande-money,norfromthecentralbankasalenderoflastresort.Inaddition,theytieupliquidityandcanfragmentthemonetarysystem,thusunderminingthesinglenessofthecurrency.9Asstablecoinsarebarelyusedtopayforreal-worldgoodsandservices,butunderpinthelargelyself-referentialDeFiecosystem,somehavequestionedwhetherstablecoinsshouldbebanned.10Aswillbediscussedbelow,thereismorepromiseinsounderrepresentationsofcentralbankmoneyandliabilitiesofregulatedissuers.ThecollapseoftheTerraUSDstablecoinTheimplosionofTerraUSD(UST)highlightsinherentfragilitiesinsomeversionsofstablecoins.TheuseofUSTgrewrapidlyover2021–22sothat,priortoitscollapse,itwasthethirdlargeststablecoin,withapeakmarketcapitalisationof$18.7billion.Analgorithmicstablecoin,itmaintainedvaluebyadjustingsupplyinanautomatedarb