Alex Mashinsky, the CEO of Celsius Network, believes that crypto market participants should know that not all stablecoins are designed in the same way.
Stablecoins are crypto-assets built in a way that is designed to have a relatively stable value by being pegged to a commodity or currency such as the US dollar.
Mashinsky says that not all stablecoins can be considered a stable asset in the latest interview, following Terra’s algorithmic stablecoin meltdown.
Mashinsky says it’s quite important for people to understand that not everybody that claims themselves to be a stablecoin is a stablecoin. It doesn’t mean that if a coin is attached to some kind of algorithm, it doesn’t mean that it is a stablecoin, so there is a need for a separation.
Celsius has support for 14 different assets that are called a form of stablecoin; however, they are separated into batches. The USDC (USD Coin), the TUSD (TrueUSD), and the USDP (Pax Dollar), which is the Paxos coin. As it is known that for every token, every dollar, every ERC-20 which is issued, there is a dollar behind it either in a bank account, in the form of cash, or the form of treasuries.
The CEO adds that it’s a 1:1 peg, there is no doubt about it.
Owners will still be able to redeem the full value of their holdings via the stablecoin issuer, even if the value of the said stablecoins fluctuates in some crypto, adds Mashinsky.
Concluding, he said that the users could redeem it any time, and people would have to comply that it means nothing even if some coin is trading at $0.98, even if USDC trades on some exchange at $0.98. They see the price on the exchange, price on FTX, or price on Binance, which means that the willing seller and willing buyer have sealed the deal at $0.98. It does not have any relation with USDC or USDT; he adds that people need to understand it.
Source: https://www.thecoinrepublic.com/2022/05/17/following-terras-meltdown-celsius-network-ceo-says-not-all-stablecoins-are-stablecoins/