Vitalik Buterin Calls ETH-Backed Algorithmic Stablecoins "True DeFi" Ahead of Feb. 10, 2026 White House Stablecoin Talks

Ethereum co-founder Vitalik Buterin said ETH-collateralized algorithmic stablecoins represent "true DeFi" by shifting counterparty risk from token holders to market makers through smart contract-based supply adjustments, contrasting them with USDC-based structures that rely on centralized custodians. He outlined a two-stage model in which ETH-backed designs initially distribute risk to market makers, followed by diversified real-world asset-backed stablecoins that maintain decentralized oversight while reducing single-asset exposure. USDC-based DeFi protocols that deposit fiat-backed tokens into smart contracts expose users to central counterparty risk and face regulatory scrutiny, particularly around interest-bearing USDC products that banks warn could drain traditional deposits, while crypto firms advocate for decentralized alternatives preserving user control. The White House plans a February 10, 2026 meeting on stablecoin and interest-bearing token rules, with Coinbase, Circle, and Ripple expected to join discussions that could shape treatment of both algorithmic and fiat-backed stablecoins in the U.S. market.