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Report on Stablecoins [pdf]

home.treasury.gov

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Re: Report on Stablecoins [pdf]

#191

Post by swader999 »

brightball wrote: post #181
dustingetz wrote: post #80

Earlier quoted context omitted.

Risk is that a tether run causes all of crypto to collapse, not just USDT. How many actual dollars are in the system? Everything real has been exfiltrated through electricity bills, taxes and early adopters selling, the entire crypto economy is a hollow shell, leveraged on retail deposits.

I always love looking at “market cap” for these things. As if every coin there could actually be sold for the price listed making it worth hypothetical billions. Even a small cash out will cut the value to pieces.

That's the same with many markets though. Market cap is a pretty silly metric to use for almost any market.

Re: Report on Stablecoins [pdf]

#192

Post by BoiledCabbage »

mattnewton wrote: post #185
wpietri wrote: post #111

Earlier quoted context omitted.

Exactly. Ultimately cryptocurrencies are a negative-sum game in that they take in real money and just move that money around, while spending some on overhead. In contrast, imagine investing in, say, a new fast-food franchise joint. They money you put in there is used to acquire assets that are used to produce goods that people will pay to consume. If it's a well-run business, the value of the outputs will be more tha…

I'm a crypto bear myself, but I'm not sure I agree with this argument. Plenty of services are built around "just moving money around" - accounting in this way has a ton of real value or else stripe, visa, paypal etc wouldn't be the huge companies they are. The questions are, whether "investing" by buying and holding is the right way to capture the value that this produces, and whether the benefits of doing it on a di…

visa, paypal... all provide value in allowing commercial transitions. Exchange of goods and services, digitally or on credit. The value it is providing is eliminating the inefficiency of barter (which cash also does), and allowing remote digital transactions, again good for societal benefit.

There is no societal benefit to buying, holding, selling a crypto currency.

The thing that could provide societal value is smart contracts - but that has nothing to do with crypto. Visa (or Stripe) could implement smart contracts in javascript on top of their platform and society gets pretty much all of the benefits without needing any of the crypto.

Re: Report on Stablecoins [pdf]

#193

Post by Lordarminius »

CryptoPunk wrote: post #120
Animats wrote: post #47

This is good. The backing of stablecoins is a very real issue. As the Treasury points out, there's a very real possibility of a run. Two stablecoins have crashed so far, SafeDollar SDO, and $TITAN. They went all the way to zero. Can Tether survive a net outflow? Probably not. They don't have the collateral. Dai is really a derivative of Etherium. Dai is backed by Etherium at 150%. So value in Dai is at risk if the pr…

FYI, this individual has been deliberately misspelling Ethereum for 5+ years on Hackernews, as a form of mockery: https://news.ycombinator.com/item?id=9988438

He can have fun remaining poor.

Re: Report on Stablecoins [pdf]

#194

Post by TomSwirly »

spir wrote: post #182
okareaman wrote: post #64

Historically, we've had major bubbles and crashes in all kinds of financial markets, from stocks and bonds, to property and dotcom stocks. Is there any reason to believe that cryptocurrency is more stable and we won't have a catastrophic crash?

Crypto "expert" here. We will have a catastrophic crash, it's normal and natural. But, the tech is here to stay and is 100x better than existing solutions. Crypto is changing the world, one crash at a time :)

> 100x better than existing solutions.

And after ten years, there isn't one actual application of cryptocurrencies except for speculation and crime.

Re: Report on Stablecoins [pdf]

#196

Post by swader999 »

wpietri wrote: post #111
dustingetz wrote: post #80

Earlier quoted context omitted.

Risk is that a tether run causes all of crypto to collapse, not just USDT. How many actual dollars are in the system? Everything real has been exfiltrated through electricity bills, taxes and early adopters selling, the entire crypto economy is a hollow shell, leveraged on retail deposits.

Exactly. Ultimately cryptocurrencies are a negative-sum game in that they take in real money and just move that money around, while spending some on overhead. In contrast, imagine investing in, say, a new fast-food franchise joint. They money you put in there is used to acquire assets that are used to produce goods that people will pay to consume. If it's a well-run business, the value of the outputs will be more tha…

You could make the same claim about any kind of money though. Whose to say the USD or GOLD or CAD or tree bark is real money? A productive asset is an entirely different thing. It's not easy to convert an asset for instance or walk across a border with it.

People make the fundamental mistake thinking these things are investments, they aren't, it's just currency or forex speculation that we are doing here.

Re: Report on Stablecoins [pdf]

#197

Post by jonwinstanley »

nostrademons wrote: post #132
NikolaNovak wrote: post #87

Earlier quoted context omitted.

>>There's a canonical toxic response to this = HFSP. I don't feel this was your actual response, but I still need to address it because I don't understand how anybody ever can have that as a remotely legitimate, thought-out response. How can any financial instrument/currency make everybody "rich", in any real terms? If you gave everybody million USD tomorrow, it'd crash so bad that we'd be right back where we came fr…

There's a bunch to unpack here, on both sides. To start with, I'll say that I agree with the mainstream view that cryptocurrency isn't actually creating wealth, in the sense of non-financial real goods that improve people's lives. It's redistributing it. Everybody's crypto gain comes at the expense of somebody else's crypto loss. I'll also throw in that folks who say "HFSP" are often the losers, because they're the o…

Can you explain how all gains are from other peoples losses?

Someone invented a technology. Initially it was worth zero. Now it’s worth 1tn. The gains are from the gradual realisation that the technology has some merits. There are way more gains than losses… so far at least.

Re: Report on Stablecoins [pdf]

#198

Post by [deleted] »

CryptoPunk wrote: post #151
wpietri wrote: post #122

Earlier quoted context omitted.

Stablecoin issuers are already effectively banks. In particular, wildcat banks: https://en.wikipedia.org/wiki/Wildcat_banking Spoiler alert: there's a reason we had 150 years without wildcat banks.

The popular conception of the so-called free banking era, and the cause and prevalence of wildcat banking, is wrong. https://www.alt-m.org/2021/07/06/the-fable-of-the-cats/

[deleted]

Re: Report on Stablecoins [pdf]

#199

Post by Lordarminius »

LatteLazy wrote: post #170

The only real point of stable coins seems to be tax/sanctions evasion. Given that, no respectable institution (tier 1 banks etc) will run one. Given that, all stable coins are only stable till the disreputable nature of the operator catches up with them...

> The only real point of stable coins seems to be tax/sanctions evasion.

Do you have any hands on experience with crypto ?

Re: Report on Stablecoins [pdf]

#200

Post by habitue »

swader999 wrote: post #191
brightball wrote: post #181

Earlier quoted context omitted.

I always love looking at “market cap” for these things. As if every coin there could actually be sold for the price listed making it worth hypothetical billions. Even a small cash out will cut the value to pieces.

That's the same with many markets though. Market cap is a pretty silly metric to use for almost any market.

It's a useful metric in one particular case, which is if you're looking to buy out the stock
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