The peg could be broken as we've seen with a number of stable coins so far this year. I've explained in previous comments why algo-stablcoins are doomed to fail. The traditional stable coins require a lot of trust and I'm not sure how they fall in the capital structure of the company. Even if it were backed 1:1 with fiat, if someone like Coinbase goes into bankruptcy, is the pool of money for their stable coins protected?
> if someone like Coinbase goes into bankruptcy, is the pool of money for their stable coins protected?
Theoretically, yes. Circle's reserves are separated from Coinbase. So one could be worried about their assets if they were being held by Coinbase, but if you are holding USDC on your own Circle should still be able to redeem USDC for dollars.
