Vitalik Buterin argues that current decentralized stablecoins lack the resilience needed to support crypto’s long-term goals. He identifies three main flaws: dependence on a single fiat currency reference (mainly the U.S. dollar), vulnerability of oracle systems to manipulation by large capital holders, and distortions from staking yields that undermine stablecoin economics. Stablecoins, typically pegged to fiat currencies, have seen market capitalization rise sharply due to increased regulation and institutional adoption, but this trend has intensified debate over their role: as decentralized alternatives or regulated financial instruments. Critics warn that stablecoins tied to government-issued dollars and managed by corporations risk undermining crypto’s values of censorship resistance and financial independence. Buterin warns that even stablecoins pegged to the U.S. dollar pose long-term risks if the dollar’s value erodes. He and others argue that a truly resilient stablecoin should be decoupled from any single state or fiat currency, possibly backed by a diversified basket of assets. Buterin also stresses that decentralization of oracles and designing fairer, less financially extractive governance are crucial. He suggests solutions like lowering staking yields and adapting staking mechanisms for more robust, competitive stablecoin models.