Celsius Network CEO Gave Honest Facts About Stablecoins In His Recent Interview

According to Celsius Network CEO Alex Mashinsky, crypto market participants should be aware of stablecoins, which are crypto assets designed to have a somewhat stable value by being tied to a commodity or currency such as the US dollar. We have some of his most recent interview quotes.

​“It’s very important for people to understand that not everybody who calls themselves a stablecoin is a stablecoin. Just because you have some kind of an algorithm and you attach the word stablecoin to it does not mean you are a stablecoin, so we need to really separate.

Celsius supports 14 different assets that are considered a form of stablecoin, but we group them into different buckets.

​You have the USDC (USD Coin), the TUSD (TrueUSD), the USDP (Pax Dollar), which is the Paxos coin and you know that for every dollar, every token, every ERC-20 that is issued, there is a dollar sitting in a bank account in the form of cash or in the form of treasuries.” It’s 1:1 peg. No question about it.

It’s very important for us to understand that there are three groups. There’s the fully-backed stablecoins that are regulated. Most of them are trust companies, some of them are even basically governed by the NYDFS (New York State Department of Financial Services). That’s the highest standard in the nation… 

Then you have a second group, which is the over-collateralized assets. Tether, DAI are over-collateralized…

Tether has liquid assets that are not crypto compared to DAI that only has crypto assets…

 During rough times like we had in this week, who’s going to have a better peg if they’re over-collateralized? DAI or Tether? But they’re in a different bucket.   

Then you have a third bucket, which is people who just call themselves stablecoins, and they created this or that synthetic representation and basically you’re taking very high risks when you buy into that scenario. LUNA (UST) created its own little world. It wasn’t so little.

​ It was $50 billion of market cap that just disappeared but it was its own world and when that bubble collapsed, it did not affect anything on the other stablecoins that are either over-collateralized or pegged.”

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​Even if the value of the stablecoins mentioned varies in some crypto exchanges, owners can still redeem the full value of their crypto holdings through the stablecoin issuer, according to Mashinsky.

“You can redeem it at any time, and people have to understand that just because something trades at $0.98, even if USDC trades on some exchange at $0.98, that means nothing, but people don’t understand that.

They look at the price on the exchange, price on Binance or price on FTX, just means that the willing buyer and the willing seller exchange hands at $0.98 on that platform.

​That has nothing to do with USDC or USDT or anybody else, and it’s important that people understand that.”