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Report on Stablecoins [pdf]

home.treasury.gov

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Re: Report on Stablecoins [pdf]

#311

Post by asdfsd234234444 »

mminer237 wrote: post #263
spir wrote: post #182

Earlier quoted context omitted.

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 :)

The only practical differences in the tech is that it wastes more power, has no insurance, has no fraud remediation, and has no safeguard against volatility. I guess the potential anonymity too, but that's only really a practical benefit if making an illegal transaction. The only time I can ever see a cryptocurrency being worth it is if you do not have any central authority you can trust. If we ever get to the point…

Comments like this make me believe that Crypto still has a ways to run up because most people still do not understand it yet - or at least not the full breadth of stuff that is happening in the industry.

Re: Report on Stablecoins [pdf]

#312

Post by viraptor »

dustingetz wrote: post #80
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…

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.

This is a possibility of course, but the second claim is something that would really need some proof. It's sure fun to say, but did you calculate it or do you just want it to be true?

Re: Report on Stablecoins [pdf]

#313

Post by Maximus9000 »

Scott_Sanderson wrote: post #216
trophycase wrote: post #128

Earlier quoted context omitted.

Actually a huge fraction of DAI is backed by USDC and other assets.

Correct, OP seems to be referring to single-collateral DAI aka SAI, which is deprecated. The current DAI is backed by a basket of assets. IMO, the basket is too heavily weighted towards centralized stablecoins like USDC. I rotated some of my MKR holdings to Terra/Luna, which may have a better peg mechanism (although it is similar to Titan, which exploded).

> I rotated some of my MKR holdings to Terra/Luna, which may have a better peg mechanism

Me too!

Re: Report on Stablecoins [pdf]

#314

Post by sneak »

fancyfredbot wrote: post #137
mgamache wrote: post #94

Earlier quoted context omitted.

All traditional methods use gatekeepers that control the flow of money. If you can't do what you want with your money is it really yours? The Trustless nature of BTC involves a seeming waste of energy, but you get a lot in return (like ownership of your money).

Sure, but my point was not really about trust. My point is that speed is easier to achieve without Blockchain than with it. It's strange that the centralised solution is slower.

The centralized, heavily regulated solution is slower.

If they could impose all the regulation they want on permissionless, trustless p2p decentralized networks, those would be slow and massively expensive, too.

Fortunately, they haven't the power. They can attack the edges (and ultimately every centralized stablecoin can be attacked) but they can't stop, say, uniswap.

Re: Report on Stablecoins [pdf]

#315

Post by andred14 »

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...

[dead]

Re: Report on Stablecoins [pdf]

#316

Post by sneak »

asasidh wrote: post #239
neaanopri wrote: post #173

Fed should make a commitment NOT to bail out crypto people under ANY circumstances!

the people who "crypto" and the people who look for handouts are two very different groups.

That was true only in limited scope and a very long time ago.

Most people in the US in the space just use Coinbase and in practice use that just like any other bank.

Re: Report on Stablecoins [pdf]

#317

Post by potatolicious »

roywiggins wrote: post #300
arcticbull wrote: post #290

Earlier quoted context omitted.

> Can Tether survive a net outflow? Probably not. They don't have the collateral. Luckily for Paolo & friends, their terms of service clearly state that they do not ever have to offer redemptions of USDT for dollars. Or even whatever IOUs and bits of string they may or may not have in reserve. Out of all the stable coins its the most likely to withstand a "run" because they do not have to pay you if you ask. In fact…

I don't get it. If everyone starts selling their Tether (because they're afraid of it not being able to maintain the peg), even if they can't sell the Tether back to the company, won't that crater the Tether price- possibly to zero- effectively killing the currency? Like, this happens with currencies that are pegged to the dollar. The government that's supposed to be maintaining the peg starts to run out of dollars a…

Exactly this - the idea that Tether not being legally obligated to let you cash out USD somehow being a shield against a run seems ridiculous.

Being unable to redeem your USDT for dollars - regardless of reason (because Tether is out of money or Tether is refusing) - is what causes the run and the crash.

An entity that is holding a bunch of cash but refusing to honor IOUs it has issued will find that the value of those IOUs will rapidly approach zero. Permanently. Even if it laters starts honoring those IOUs, the IOUs have lost their utility forever and the price will remain at/near zero.

Re: Report on Stablecoins [pdf]

#318

Post by andred14 »

vineyardmike wrote: post #3

> To address risks to stablecoin users and guard against stablecoin runs, legislation should require stablecoin issuers to be insured depository institutions, which are subject to appropriate supervision and regulation, at the depository institution and the holding company level. > To address concerns about payment system risk, in addition to the requirements for stablecoin issuers, legislation should require custodi…

Screw governments and screw legislation.

After all the damage and destruction and lies of these past couple years such as the FAKE pandemic i do not wish to be governed.

Good day to you.

Re: Report on Stablecoins [pdf]

#319

Post by andred14 »

vineyardmike wrote: post #3

> To address risks to stablecoin users and guard against stablecoin runs, legislation should require stablecoin issuers to be insured depository institutions, which are subject to appropriate supervision and regulation, at the depository institution and the holding company level. > To address concerns about payment system risk, in addition to the requirements for stablecoin issuers, legislation should require custodi…

The government has no right to pass laws about something just because it feels like it. Cryptocurrencies are harming nobody.

In reality our leaders just want to destroy this thing that is enabling the people to succeed and exit from the perpetual slave/debt/fiat system.

Re: Report on Stablecoins [pdf]

#320

Post by blhack »

TomSwirly wrote: post #194
spir wrote: post #182

Earlier quoted context omitted.

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.

Are you somebody who believes that finance generally is not useful?

Traditional financial institutions also more or less shuffle USD around. Crypto is that.

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