Tether’s U.S.-Focused Stablecoin Surges 500% in One Month but Trails Major Rivals
The decentralized finance sector is under fire. A $20 billion drop in total value locked (TVL) and $1.1 billion lost to hacks, including the $292 million Kelp DAO bridge exploit, have fueled a wave of pessimism across the crypto industry. One commentator on X boldly declared “DeFi is dead,” while former OpenZeppelin CTO Manuel Aráoz warned that AI is becoming “superhuman” at hacking, making DeFi fundamentally unsafe.
Andrew Forson, president of DeFi Technologies, isn’t buying any of it. In an interview with CoinDesk, he pushed back hard against the narrative, calling it a failure of understanding. “DeFi is way more than those protocols that have been hacked,” Forson said. “Those who don’t know that are suffering from deep ignorance.”
The DeFi TVL drop, Forson argues, tells only a fraction of the story. While bridge exploits make headlines, the stablecoin base layer, the actual foundation of the DeFi economy, is doing anything but collapsing. Stablecoins held over $150 billion in U.S. Treasuries by end of 2025, more than the sovereign holdings of Saudi Arabia or Germany, according to Forson, a figure independently supported by Bank for International Settlements data showing stablecoin T-bill positions exceeding $153 billion as of December 2025. “All of those treasuries are used to back currencies and stablecoins that are predominantly used in DeFi,” he noted. Transaction volumes for core stablecoins like USDT and USDC are growing 20% to 30% month-over-month, he added.
On the security debate, Forson flips the script entirely. Yes, the code is open-source and visible to all, including AI systems. But he contends that transparency is a feature, not a flaw. “When something goes wrong, everybody sees it, everybody talks about it and they fix it,” he said, contrasting DeFi’s open correction process with legacy banking systems where systemic errors can sit hidden “in private buckets” for years. Crucially, no core hacks to Bitcoin, Ethereum, USDC, or USDT have been reported, the hacks have been at the application layer, not the infrastructure.
Forson also puts the DeFi TVL drop in historical context, drawing a line from the 1987 stock market crash, which prompted Wall Street to introduce automated circuit breakers, to today’s DeFi protocol patches. “Toddlers learn to walk by falling,” he said. The blockchain space is barely 16 years old, and every exploit has become a lesson permanently coded into the system.
The bigger signal, he says, is institutional. Blockchain data from Chainalysis shows stablecoins moved more than $35 trillion in 2025, a figure projected to reach hundreds of trillions by 2035. Meanwhile, Wall Street has not stepped back, it has stepped in. Morgan Stanley, BlackRock, JPMorgan, and Charles Schwab have all rolled out crypto and tokenization services in recent weeks.
“If the Wall Street players don’t participate in this space now, they will lose market share, because someone else will,” Forson concluded. The DeFi TVL drop may have rattled nerves, but if history is any guide, the sector may be walking straighter because of it.
