As the stablecoin landscape continues to evolve, two emerging trends are beginning to reshape the conversation around digital assets: the resurgence of algorithmic stablecoins and the growing interest in gold-backed alternatives. Sonic, a rebranded high-speed blockchain, is moving ahead with the development of a yield-generating algorithmic stablecoin despite lingering concerns following the Terra-Luna collapse. At the same time, Bitcoin advocate Max Keiser is predicting a shift toward gold-backed stablecoins, arguing they offer greater global trust and geopolitical neutrality than US dollar-pegged tokens.
Sonic Blockchain Pushes Forward with High-Yield Algorithmic Stablecoin Amid Lingering Terra Ghosts
The Sonic blockchain, a project that rebranded from the Fantom network and touts itself as the fastest Ethereum Virtual Machine (EVM) chain, is forging ahead with one of crypto’s most controversial innovations: an algorithmic stablecoin that promises yields of up to 23%. The bold move is reigniting conversations and concerns about the risks of such tokens, especially following the catastrophic collapse of TerraUSD (UST) nearly three years ago—a crisis that ushered in one of the longest crypto winters in history.
The announcement came via Andre Cronje, co-founder of Sonic Labs and founder of Yearn.finance, who revealed in a March 22 post on X that a proof-of-concept (POC) for the stablecoin was showing promising yield results.
“POC looks good. Yielding > 200% APR @ 10m TVL, around 23.5% APR @ 100m, steady at around 4.9% at 1bn+. Will scale up and get team for a full release,” Cronje wrote.
Despite his optimism, Cronje didn’t shy away from admitting the emotional burden associated with algorithmic stablecoins. Just one day earlier, he confessed to experiencing post-traumatic stress disorder (PTSD) due to the fallout from Terra’s failure.
“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement,” he added.
Algorithmic stablecoins differ from fiat-backed stablecoins by using code-based mechanisms to maintain their peg to the US dollar or other fiat currencies. These mechanisms often rely on incentivizing traders or burning and minting partner tokens to maintain equilibrium.
While elegant in theory, they have proven dangerous in practice.
In May 2022, TerraUSD (UST), once a rising star in decentralized finance, lost its peg during a liquidity crisis that rapidly spiraled out of control. The token, which offered a tantalizing 20%+ APY through the Anchor Protocol, crashed from $1 to as low as $0.30. Its sister token, LUNA, used to help stabilize UST, saw a catastrophic collapse of over 98%, plunging from $120 to less than a dollar.
The $40 billion implosion of the Terra ecosystem rattled the entire industry, tanking investor confidence and drawing the attention of global regulators. It also left investors—both retail and institutional—holding worthless tokens and prompted a wave of lawsuits and investigations into Terraform Labs and co-founder Do Kwon.
Unlike Terra, Sonic is attempting to address scalability and finality as foundational elements of its blockchain. The platform claims to be the fastest EVM chain, boasting a true 720 milliseconds (ms) finality—an industry record confirmed during its testnet launch on Sept. 8, 2024.
Sonic’s revamped network has attracted considerable attention. Since rebranding from Fantom, its total value locked (TVL) has surged by 66% to $253 million. The network’s ability to finalize transactions faster than its competitors has positioned it as a promising infrastructure layer for high-frequency decentralized applications (dApps), including stablecoins.
Now, with the development of a yield-generating algorithmic stablecoin, Sonic is once again pushing the boundaries of decentralized finance—this time, in more dangerous waters.
The move comes at a time when regulatory bodies are actively cracking down on algorithmic stablecoins. The European Union’s Markets in Crypto-Assets (MiCA) Regulation will effectively ban the issuance of such tokens in the bloc, specifically citing the need to avoid repeats of the Terra-Luna disaster.
The US Securities and Exchange Commission and other global regulators have similarly taken a cautious stance, noting the lack of collateral backing and the systemic risks these coins can pose to broader crypto markets.
Despite this, interest in algorithmic stablecoins hasn’t completely faded. Speculators continue to trade Terra’s resurrected LUNA token.
This enduring appetite for risk sheds light on a key challenge facing projects like Sonic: the allure of high yields remains powerful, even as memories of devastating losses linger.
Can Sonic Break the Algorithmic Curse?
Sonic’s team believes their new algorithmic stablecoin is fundamentally different from its predecessors, with a more sustainable yield curve and enhanced mechanisms to avoid death spirals. The estimated yield decreases as more capital flows in, designed to maintain long-term equilibrium and reduce the reliance on overly generous incentive programs.
However, with Cronje himself expressing hesitation and PTSD from the last cycle, even insiders recognize that the ghosts of Terra still haunt this sector.
Whether Sonic’s version of an algorithmic stablecoin can survive where others have failed remains an open question. For now, all eyes are on the upcoming release as the industry holds its breath—again.
Gold-Backed Stablecoins Poised to Challenge Dollar Dominance, Says Bitcoin Maximalist Max Keiser
In related news, the battle for the future of digital money is heating up—and it may be fought not in Bitcoin or the US dollar, but in gold. According to Bitcoin maximalist and prominent financial commentator Max Keiser, gold-backed stablecoins are poised to overtake US dollar-pegged alternatives on the global stage due to gold’s inflation-hedging properties, minimal volatility, and geopolitical neutrality.
In a series of recent statements, Keiser criticized the push by US lawmakers to preserve global dollar dominance through fiat-backed stablecoins. Instead, he predicted a coming wave of gold-backed digital tokens led by countries that oppose US financial hegemony.
“Russia, China, and Iran are not going to accept a U.S. dollar stablecoin. I predict they will counter the USD stablecoin with a gold one,” Keiser said, arguing that these nations see the dollar as a geopolitical weapon rather than a trusted reserve asset. “China and Russia have a combined 50,000 tonnes of gold — more than what is reported,” he added.
Keiser’s comments bring attention to a growing ideological and strategic divide between Western and Eastern powers when it comes to the future of monetary systems. US officials, including Treasury Secretary Scott Bessent and Federal Reserve governor Christopher Waller, have recently emphasized the importance of stablecoins pegged to the dollar as tools for maintaining US financial influence abroad.
At the March 7 White House Crypto Summit, Bessent announced that the Trump administration would make dollar-pegged stablecoin development a top national priority, citing the need to "protect the dollar's reserve currency status" and prevent the global financial system from fragmenting into competing digital zones.
In contrast, many foreign governments are exploring or already piloting alternatives, including stablecoins backed by hard assets such as gold. These efforts reflect growing resistance to dollar-centric financial infrastructure and the sanctions power it enables.
The rise of gold-backed stablecoins like Tether’s Alloy (aUSD₮), launched in mid-2024, marks a significant shift in how value is being collateralized in the digital age. Alloy is backed by Tether’s XAU₮, a token that offers a claim to physical gold held in reserve.
Gabor Gurbacs, founder of PointsVille and former VanEck executive, argued that XAU₮ represents a return to the sound money principles that underpinned the dollar before it was taken off the gold standard in 1971.
“Tether Gold is what the dollar used to be before 1971,” Gurbacs noted in a March 19 post on X. “XAU₮ is up 15.7% year-to-date, while the broad crypto market is in the red. Foundations and businesses should hedge their holdings with XAU₮.”
Indeed, XAU₮ recently hit an all-time high, buoyed by a historic rally in the global gold market amid fears of economic stagflation, geopolitical instability, and waning trust in central banks.
Keiser and other critics argue that dollar-pegged stablecoins, while convenient, carry inherent political baggage. Since they are ultimately backed by dollar-denominated assets and often governed by US regulations, adversarial nations are unlikely to adopt them for large-scale cross-border transactions.
The introduction of gold-backed alternatives, therefore, could allow countries like Russia, China, and Iran to participate in the digital economy without exposing themselves to US surveillance or sanctions.
“Gold doesn’t come with a central bank or a central government,” Keiser pointed out. “It’s been money for 5,000 years, and that credibility is not something the dollar can easily replicate—especially not in the form of a token.”
Lawmakers Push for Stablecoin Regulation
Despite these geopolitical headwinds, US policymakers are pressing ahead with legislative efforts to support dollar-based stablecoins. The Stable Act of 2025 and the newly proposed GENIUS Stablecoin Bill aim to establish clear guidelines for issuance, reserve requirements, and regulatory oversight.
Proponents argue that without such a framework, the US risks losing control over the most important financial innovation of the 21st century. They see dollar-pegged stablecoins as a necessary tool for preserving dollar supremacy in an increasingly multipolar world.
However, the rise of gold-backed alternatives threatens to upend these plans. As more investors, corporations, and even governments begin to hedge with digital assets backed by physical gold, the appeal of fiat-pegged coins may diminish—especially in regions where trust in the US financial system is already eroding.
The stablecoin market is approaching a critical inflection point. On one side is the US-led vision of regulated, fiat-pegged stablecoins tightly integrated into the existing financial system. On the other is an emerging movement toward decentralized, hard-asset-backed tokens that reject centralized control and seek to restore monetary neutrality.
With gold-backed tokens like XAU₮ gaining traction and central banks worldwide accumulating bullion at record pace, the digital gold standard may no longer be a fringe idea—it could be the foundation of the next global monetary order.
And as Max Keiser sees it, the race is already on.
