The Parting Shot | The Curious Case of UST: Algorithmic Stablecoins and Timeless Lessons from the Asian Financial Crisis

At Vertex Ventures Southeast Asia and India, we are proud of our interns' contribution, their creative ideas and more importantly, their growth journey. The Parting shot series showcases reflective articles written by our interns at the end of their internship. We hope you enjoy the piece.

The financial headlines over the past month have been dominated by the selloff in the crypto markets, catalysed by the unpegging of the TerraUSD (UST) stablecoin and freefall of its sister cryptocurrency LUNA.

Following from this, there have been reports and analyses suggesting that the crypto equivalent of a “Soros-like attack” was the main culprit for its collapse. Digging further into the deep-lying causes of the UST meltdown however, it is hard to ignore the similarities between its collapse and the events leading up to the Asian Financial Crisis, specifically the collapse of the Thai Baht’s peg to the US dollar.

What are the parallels that can be drawn and what can we learn from the annals of economic history?

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