Definition
A depegging event occurs when a stablecoin trades away from its intended reference value.
Common Causes
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- Liquidity shortages
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- Redemption suspensions
- Reserve uncertainty
In practice, depegging reflects balance sheet stress as markets price in doubts about issuer liquidity, custody access, or redemption capacity ahead of formal confirmation.
What Depegging Reveals
Depegging is usually a symptom of deeper balance-sheet stress.
Related Concepts
Written by Ronnie Huss.
Stablecoin Depegging Explained: Causes and Warning Signs
