Ethereum Needs Better Decentralized Stablecoins: Vitalik Buterin (2026)

It isn’t a good idea to fully back a stablecoin with a single fiat currency, because if that nation-state fails, so will the stablecoin, argues Ethereum co-founder Vitalik Buterin.

One of the inventors of Ethereum, Vitalik Buterin, argues that Ethereum needs better decentralized stablecoins to truly give people independence from the traditional financial system.

“We need better decentralized stablecoins,” Buterin said in a post to X on Sunday, in response to Gabriel Shapiro, a lawyer at crypto investment firm Delphi Labs, who said Ethereum is "tripling down on disrupting power to enable sovereign individuals.”

However, Buterin said for this to happen, decentralized stablecoins need to address three problems.

One of the problems is that most stablecoins are pegged to the US dollar. CoinGecko data shows 95% of stablecoins are pegged to the USD.

Buterin argued that while tracking the USD may be acceptable in the short-term, a stablecoin’s survivability shouldn’t rest on the shoulders of a nation-state.

“On a 20 year timeline, well, what if it hyperinflates, even moderately?,” said Buterin, arguing that there should be an index to track that’s “better” than the price of the US dollar.

The second issue is related to oracles, which fetch real-world data for blockchains to ensure stablecoins maintain accurate value and proper collateralization.

Buterin said that an oracle needs to be strong enough to resist manipulation attacks without protocols raising costs for users or artificially inflating token prices.

The third issue, according to Buterin, is that staking returns need to remain high without destabilizing collateral or discouraging use.

Source: CoinTelegraph