Deutsche Bank researchers have issued a stark warning about the stability of stablecoins, predicting that most will fail due to a lack of reliability and transparency. The study, which examined 334 stablecoins, found that only 14% have survived so far, raising concerns about the long-term viability of these altcoins pegged to fiat currencies.

The analysts emphasize that stablecoins' success hinges on factors like reliability, reserve support, and operational controls, which many currently lack. Even dominant players like Tether, with a market value exceeding $100 billion, have faced scrutiny over transparency and reserve assets, receiving fines from regulatory authorities. The collapse of Terraform Labs' TerraUSD and Luna tokens serves as a cautionary tale, exposing the risks inherent in the stablecoin market when issuers fail to maintain adequate reserves and transparency.

Deutsche Bank strategist Marion Laboure highlights the similarities between stablecoins and pegged currencies, noting their dependence on reserves and reliability. Both are vulnerable to speculative pressures and closely follow the US dollar's value. In response, Tether defends its commitment to regular reserve statements and addressing regulatory concerns, criticizing the lack of concrete evidence in Deutsche Bank's analysis.