Nevin Freeman, CEO of Reserve said that the issue here comes down to securities laws and liquidity, and the upshot is that some kinds of stablecoins are really hard to implement in the current regulatory environment, but many other designs will be fine.
“Some stablecoin designs have more than one token – there's the stablecoin, and then there is a "share“ token or a "bond” token. Why do they exist? In some designs, these tokens are minted by a smart contract and used to buy up stablecoins any time the price of the stablecoin needs to be increased back to the peg. This means that any time the price of the stablecoin is below the peg, somebody out there has to be willing to buy these newly minted tokens in order for the smart contract to buy up stablecoins. If nobody wants to buy them, then the peg is, by definition, broken”, Freeman said.
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