USDC’s Depeg Laid Bare the Risks Traditional Finance Poses to Stablecoins

There is also growing interest in exploring alternative solutions to address the shortcomings of stablecoins. One potential alternative is tokenized bank deposits, which allow users to hold digital tokens that represent ownership of underlying bank deposits. Tokenized bank deposits would be subject to the regulatory standards of banking, providing greater confidence in the underlying assets’ safety, although credit risks associated with traditional banking would, of course, remain.