Nobel laureate economist Paul Krugman has criticized stablecoins, arguing they lack a useful function and may facilitate criminal activity. His remarks, made in the US, have sparked debates within the cryptocurrency community. Krugman’s statement aligns with broader skepticism about stablecoin use in financial markets. This critique comes amidst ongoing scrutiny of stablecoin backing following recent market disruptions like Terra UST’s collapse. While some industry leaders, such as Coinmetrics co-founder, argue for stablecoins’ transactional efficiency and highlight their utility within the financial system, Krugman’s views reflect historical skepticism towards cryptocurrencies. The stability of these digital currencies has been questioned due to past incidents of peg loss. The Terra-Luna collapse has spurred academic and regulatory evaluations, focusing on stablecoin infrastructure and resilience. Krugman’s comments have introduced a new layer of complexity, potentially impacting the future of regulatory frameworks for stablecoins.