A $4 billion lawsuit related to Terraform Labs' collapse is raising questions about how stablecoins maintain their $1 peg. The lawsuit, brought by a court-appointed administrator, accuses Jump of supporting TerraUSD's peg through undisclosed trading arrangements. This case highlights concerns about whether stablecoin stability relies on market structures and incentives, rather than just reserves. As stablecoins become more integrated into payment systems, like Visa's USDC settlement and SoFi's dollar-pegged token, disruptions can cause real issues. The global stablecoin supply is around $309 billion, with USDT dominating. Regulators are increasingly scrutinizing stablecoins, as evidenced by the GENIUS Act in the U.S. and the Bank of England's consultations, signaling a move towards stricter oversight.

A $4 billion lawsuit related to Terraform Labs' collapse is raising questions about how stablecoins maintain their $1 peg. The lawsuit, brought by a court-appointed administrator, accuses Jump of supporting TerraUSD's peg through undisclosed trading arrangements. This case highlights concerns about whether stablecoin stability relies on market structures and incentives, rather than just reserves. As stablecoins become more integrated into payment systems, like Visa's USDC settlement and SoFi's dollar-pegged token, disruptions can cause real issues. The global stablecoin supply is around $309 billion, with USDT dominating. Regulators are increasingly scrutinizing stablecoins, as evidenced by the GENIUS Act in the U.S. and the Bank of England's consultations, signaling a move towards stricter oversight.