Ethereum co-founder Vitalik Buterin has raised concerns about the structural vulnerabilities of decentralized stablecoins, emphasizing risks related to dollar pegs, oracle security, and yield-driven incentives. Buterin warns that reliance on the U.S. dollar as a primary reference point exposes stablecoins to inflation and fiscal instability, potentially undermining their long-term resilience. Buterin also highlights the risks associated with oracle manipulation, which can force protocols to increase fees and incentives, shifting risk to users and eroding trust. Additionally, yield-based stablecoins face conflicts between return stability and collateral safety, particularly during market volatility. These unresolved design issues could threaten the reliability of decentralized stablecoins during prolonged market stress. These warnings come as U.S. lawmakers prepare to discuss the CLARITY Act, a bill that could significantly impact crypto regulation and influence institutional involvement in stablecoins.