(Bloomberg) -- After studying 334 currency pegs since the year 1800, Deutsche Bank Research analysts found that only 14% have survived. Applying what they learned to the world of stablecoins, they say most of these pegged digital currencies are doomed to become unmoored. 

“Some may survive, although most will likely fail,” the analysts wrote on the study published Tuesday. 

Stablecoins, which typically aim to keep a one-to-one value with fiat currencies such as the dollar, serve as a conduit for much of the trading in crypto, providing users a haven from the volatile price swings in the embryonic market. Tether Holding Ltd.’s USDT token has grown to beyond $100 billion, and even trades more on a daily basis than market bellwether Bitcoin. 

In the most high-profile example of what could go wrong, at least $40 billion worth of crypto was wiped out from the collapse of Terraform Lab’s algorithmic stablecoin TerraUSD and its sister token Luna two years ago. In that case, the two coins were designed to rely on each other to maintain value.

The Deutsche Bank analysts stated that the few successful pegged currencies that survived did so because they had credibility, were backed by reserves and operated in tightly controlled systems — three things many major stablecoins lack.

Maybe most notably, the research team wrote they are concerned about Tether because of the bigger implications it may have amid its “monopoly in the stablecoin market that has been filled with speculation and lack of transparency.”

Heightening those concerns are Tether’s history of misleading claims on reserve holdings that have led in $41 million fines by the Commodity Futures Trading Commission, the analysts said. Additionally, the researchers pointed to the reliance on Tether in the crypto derivatives market that could magnify losses and blow up levered trades.

Tether has been issuing quarterly attestations of its reserves since reaching settlements with the CFTC and New York state. 

“The 30% de-peg rate among some stablecoins is therefore hardly surprising, and many more defunct stablecoins are hard to account for,” the researchers wrote.

The report “lacks clarity and substantial evidence, relying on vague assertions rather than rigorous analysis,” Tether said in a statement. “While it attempts to forecast the decline of stablecoins, it fails to provide concrete data to support its claims.”

The researchers said they studied currency pegs because they have important parallels among them, even though they are implemented for different reasons — a government for a country’s economy, versus a private company for profit that operates globally. 

“We chose to compare stablecoins to peg currencies because historically their similarities make them a close proxy as both are pegged currencies,” said Marion Laboure, senior strategist at Deutsche Bank Research and one of the report’s authors. “Both require ample reserves and credibility from issuers, are exposed to speculative forces, and the majority of both stablecoins and historical currency pegs track the USD.”

In total, 49% of the fixed currencies in the researchers database failed, with a median life of 8-10 years for those that failed or were discontinued. However, some of the lessons that stablecoin-watchers can learn from successful pegged currencies are that “macroeconomic factors are key to determining a peg sustainability,” Marion said. “Issues around governance and speculative forces could also indicate when there’s a possibility of de-pegging.”   

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