Deutsche Bank analysts believe most stablecoins are doomed to fail following an internal analysis of 334 currency pegs over the past 200 years.

• “Some may survive, although most will likely fail,” wrote the German banking powerhouse in a study published on Tuesday.
• The analysts argued that the few FX pegs that have held staying power since the year 1800 operated with credibility, reserves, and a tightly controlled environment – all things they say stablecoins lack.
• Tether (USDT) – the world’s largest stablecoin with a $110 billion market cap – has a “monopoly in the stablecoin market that has been filled with speculation and lack of transparency,” they said.
• Tether regularly publishes reserve attestation reports with help from BDO – the fifth-largest accounting network in the world. Unlike its largest competitor, Circle, it’s yet to undergo a full audit from a Big Four accounting firm.
• Before publishing its attestation reports, Tether was forced to pay $41 million in fines to the Commodity Futures Trading Commission (CFTC) for misleading statements about its reserve composition.
• Studying past currency pegs, researchers noted that stablecoin issuers should pay attention to macroeconomic factors.
• “Issues around governance and speculative forces could also indicate when there’s a possibility of de-pegging,” they said.
• Tether responded to Deutsche Bank’s report saying it relied on “vague assertions” to back its claims, lacking “concrete data to forecast a decline in stablecoins more broadly.

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