I’ve never heard about UST before this week, but after reading about it, it’s insane to think that anybody would be dumb enough to hold something like this over a coin that’s backed by actual dollars.
Granted, there’s concerns about the centralized coins committing fraud or whatever (like the questions about whether USDT actually has the dollars to back 100% of their USDT coins), but that just means you need more… you guessed it, regulation! There’s a reason why public companies get audited, it greatly reduces the chances that they’re fraudulently reporting that they have assets that they don’t.
If you want something that stays purely on the blockchain, decentralization is fine, but there’s no substitute for forcing something to be worth $1 other than having an actual dollar backing it (and there must be a way to easily convert between the two). There’s a ton of people in the crypto space who want decentralization and avoiding regulation at any cost, but the problem is if you actually want crypto to grow and prosper, you need more centralization and more regulation.
Like if there’s a bank backed dollarcoin that’s regulated by the government (and the bank guarantees that it’s worth $1), I can put my hate of the govt aside and would rather keep my money there, vs some unknown’s project who claims that their coin will maintain a $1 value, but if it collapses unexpectedly you’re basically SOL.
Ultimately shit like this hurts confidence a lot more than increased centralization/regulation of the space.