TerraUSD collapse will ‘probably be the end’ of most algorithmic stablecoins, crypto exec says

TerraUSD collapse will ‘probably be the end’ of most algorithmic stablecoins, crypto exec says

Algorithmic stablecoins like , which collapsed and sent shockwaves through the cryptocurrency market, are unlikely to survive, the co-founder of digital currency tether told CNBC. Stablecoins are a type of cryptocurrency that is usually pegged to a real-world asset. TerraUSD or UST, is an algorithmic stablecoin which was supposed to be pegged to the . Whereas stablecoins like tether and USD Coin are backed by real-world assets such as fiat currencies and government bonds in order to maintain their dollar peg, . UST lost its dollar peg and that also led to a sell-off for its sister token . The debacle has led to warnings that algorithmic stablecoins might not have a future. "It's unfortunate that the money ... was lost, however, it's not a surprise. It's an algorithmic-backed, stablecoin. So it's just a bunch of smart people trying to figure out how to peg something to the dollar," Reeve Collins, the co-founder of digital token company BLOCKv, told CNBC at the World Economic Forum in Davos, Switzerland, last week. "And a lot of people pulled out their money in the last few months, because they realized that it wasn't sustainable. So that crash kind of had a cascade effect.