Proceedings of the 5th International Conference on Economic Development and Business Culture (ICEDBC 2025)

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Risks of Stablecoins in the DeFi Ecosystem

Authors
Haojun Wang1, *
1Fisher College of Business & College of Arts and Sciences, The Ohio State University, Columbus, OH, 43210, USA
*Corresponding author. Email: wang.15825@osu.edu
Corresponding Author
Haojun Wang
Available Online 26 February 2026.
DOI
10.2991/978-94-6239-604-3_13How to use a DOI?
Keywords
Stablecoins; Decentralized Finance; Systemic Risk
Abstract

This paper analyzes systemic vulnerabilities in stablecoins through a comparative event study of the May 2022 TerraUSD (UST) collapse and the March 2023 USDC–Silicon Valley Bank (SVB) de-pegging. Peg deviation, trading volume, and volatility measures are combined with DeFi total value locked (TVL) and stablecoin market capitalization to assess market stress, while macro-financial spillovers are evaluated using Treasury yields, the S&P 500, the VIX, and the Secured Overnight Financing Rate (SOFR). Results show distinct risk channels. UST exhibited extreme endogenous fragility, with peg deviation above 90% and a fourfold surge in volume, yet limited spillovers to traditional markets. By contrast, USDC’s deviation remained under 4% and was quickly reversed, but coincided with modest declines in Treasury yields and increased equity volatility, highlighting custodial concentration risk. The study underscores that stablecoin design strongly shapes systemic risk. Algorithmic models amplify reflexive feedback loops, while fiat-backed models introduce counterparty and custody vulnerabilities.

Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 5th International Conference on Economic Development and Business Culture (ICEDBC 2025)
Series
Advances in Economics, Business and Management Research
Publication Date
26 February 2026
ISBN
978-94-6239-604-3
ISSN
2352-5428
DOI
10.2991/978-94-6239-604-3_13How to use a DOI?
Copyright
© 2026 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Haojun Wang
PY  - 2026
DA  - 2026/02/26
TI  - Risks of Stablecoins in the DeFi Ecosystem
BT  - Proceedings of the 5th International Conference on Economic Development and Business Culture (ICEDBC 2025)
PB  - Atlantis Press
SP  - 113
EP  - 123
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-604-3_13
DO  - 10.2991/978-94-6239-604-3_13
ID  - Wang2026
ER  -