A stablecoin can be fully collateralized and still fail. Issuers can hold enough reserves to cover every dollar in circulation and still depeg if those reserves can't be accessed when they're needed. The BIS made this point in their paper "On par: A Money View of Stablecoins." They draw the analogy that stablecoins are the modern equivalent of Eurodollars, with onchain private dollar deposits replacing offshore ones. Traditional banking maintains par through central bank settlement, primary dealer networks, standing repo facilities, and a lender of last resort. Stablecoins don't have any of these mechanisms. If there's a run there's no forward market, no credit facility, and no mechanism to absorb the pressure before it hits the reserves directly. The analogy extends beyond Eurodollars. In their current form stablecoins resemble the wildcat banks of 19th century America. They operate across fragmented jurisdictions without any of the institutional infrastructure that keeps the traditional banking system stable. But this is the same trajectory the banking system itself went through. Wildcat banking was fragmented but it eventually led to federal oversight and consolidation that made the system functional at scale. The regulation coming for stablecoins is what made the banking system functional at scale too.