Analysts at Deutsche Bank, Germany's largest financial conglomerate by number of employees and assets, published a report declaring that most digital stablecoins will fail due to a lack of transparency.

Analysts at Deutsche Bank Research studied over three hundred fiat-pegged assets dating back to 1800, spanning more than two centuries. And they found out: 49% of such assets failed. Bank experts say management issues and macroeconomic vulnerability of stablecoins are the main factors of failure.

“History suggests that stablecoins may face turbulence. While some are able to survive, most are likely to fail due to a lack of transparency in operations and vulnerability to speculative sentiment.”

Deutsche Bank Research specialists recalled that in 2022, the market experienced a collapse of the stablecoin Terra USD (UST) and the related asset LUNA. As a result, investors lost $40 billion. In the spring of 2023, Circle's USDC lost its peg to the US dollar as a result of the bankruptcy of the American Silicon Valley Bank.

German bank analysts believe that such incidents highlight the risks of stablecoins and cast doubt on the future of this asset. According to the results of a survey of 3,350 clients, 42% of respondents expect the complete disappearance of stablecoins. Only 18% of participants believe in prosperity.

According to Deutsche Bank experts, the similarity of these assets makes it possible to extrapolate historical data on pegged currencies to non-algorithmic stablecoins. Bank experts even expressed doubts about the sustainability of Tether’s USDT, since the adequacy of the stablecoin’s collateral is not entirely transparent.

Tether has already responded, declaring that the bankers' report “lacks clarity, substantial evidence, and relies on vague statements rather than rigorous scientific analysis” and snapping:

“Deutsche Bank's history of fines and sanctions raises doubts about its ability to criticize others in the financial industry. The International Monetary Fund has named the institution the riskiest bank in the world.”

Earlier, Deutsche Bank experts said that for some time after the Bitcoin halving, the market should be expected to be dominated by a flat, that is, the state of an asset when its price does not rise or fall for some time.