Stablecoin Depegs Explained: What Really Happens When a Digital Dollar Breaks the Buck

Stablecoin depegs remain a persistent risk: USDC once traded at $0.87, Tether's USDT at $0.88, and Terra's UST collapsed to near zero, erasing roughly $40 billion. In November 2025, DeFi stablecoin xUSD lost over half its value in a single day. These events underscore the fragility of the $1 peg promise.