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Oh it’s even worse. For a while now some[0] have suggested part of the backing is in bonds issues by Chinese real estate companies [0] https://twitter.com/thelastbearsta1/status/14690072004965908...
Chinese real estate would be considerably better than crypto company loans, tbh.
What are people holding all those stable coins for? In contrast to other crypto currencies, nobody is holding it for speculation. I doubt anybody expects stable coins to be a better store of "dollar value" than the dollar itself. Yet, someone holds those $150B worth of stable coins. Who and why?
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Does this really matter though? Is it any different to drug lord having a tonne of dirty cash they can’t use anywhere because all the useful places you could put it want nothing to do with you? Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world.
> Watching from the sidelines, the Crypto world seems to just be morphing into the normal financial world. Say this is true, how amazing would that be for countries without existing banking infrastructure to easily access it?
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the majority of crypto is being held in non custodial wallets, not exchanges. a better way to frame your comment: why does the world use Stripe and PayPal when you can just go to your bank and ask them to setup a multi day long wire process from bank A to B for less fees?
The 'wire process' is not "multi-day-long", plus a huge number of banks now participate in Zelle, which can be used for instantaneous fund transfers with zero fees. The biggest problem with Zelle is that it looks and feels like a circa-2002 web application.
Zelle is between US banks only. some people live outside of the US, surprisingly.
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You are right. When you trade crypto->crypto, the IRS views it as if you traded crypto->USD then USD->crypto.
so when you buy 1 btc for $30k, trade the btc for 100 of bscoin, bscoin rises to 50 bscoin pet 1 btc, you change back to btc, now you have 2 btc, but the next day big crash occurs and 1 btc is worth just 10k... you cash out and there you have it, a $10k loss... but, you're supposed to pay the tax man on the bscoin -> btc trade? That makes no sense. And then what, you'll want that tax back because of the loss? More BS…
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> USDC (coinbase) is properly and regularly audited I've only found attestations just like USDT, where did you see an audit?
I’m sure I’ve seen an audit before but because Coinbase is a public company all finances have to be released so you should be able to see it there too?
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and now there is one more way to do that: crypto. it is like asking “Why Does PayPal Exist When We Have iBAN?” obviously some subset of the globe finds it more useful than iBAN transfers for their needs (like setting up an online shop).
I'm not anti crypto, I simply argue that the problems alleged by OP don't really exist except in the mind of people who once had a bank twenty years ago. By and large, if I want something that holds its value pegged to the US dollar, I hold a US dollar. Moving a US dollar costs me nothing anywhere in the world. Moving a USDT or whatever means I now have to set up an exclusive banking relationship with someone I trust…
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> The interesting idea behind crypto once was to have a totally different system. the problem with this idea is that this idea of a "different" system is just merely going to evolve back into what we have today. The fundamental needs of a financial system doesn't change much, and what we have today is fit for purpose (mostly - there's efficiency to be had and red tape to cut).
It is until you're on a list, for whatever reason. When states and countries can just block your access to your bank accounts, because you're on the other side of interests, it gets...Interesting With a decentralised approach, such actions would've needed to be implemented in the real world, not merely by the flick of a virtual lever.
The moment I learned that people want to buy crypto as a means to get rich in (evil ;)) fiat money, I knew I had a ponzi scheme in front of me. The interesting idea behind crypto once was to have a totally different system. Yet in reality, with greedy apes on a spacerock, it was an unreachable Utopia
> The interesting idea behind crypto once was to have a totally different system. the problem with this idea is that this idea of a "different" system is just merely going to evolve back into what we have today. The fundamental needs of a financial system doesn't change much, and what we have today is fit for purpose (mostly - there's efficiency to be had and red tape to cut).
and Open Banking has been working on this steadily in many countries.
The big question with Tether has been, if they are holding commercial paper, whose commercial paper? Traders who deal in commercial paper of real companies that do real stuff don't see Tether present in that market. The dollar amounts are too big to hide. The suspicion is that their "commercial paper" is high-interest loans to other cryptocurrency companies. With the whole crypto sector in decline, those loans are at…
> This is how you get a 2008-type crash - loans which seem to be unrelated but are tied to a common market. How does this happen again 15 years later? Is it because we ineffectively dealt with 2008? A result of the repeal of Glass-Steagall? Or have we over regulated banking to the point the miscreants went underground to build things like crypto? I don't get it. Crashing over and over doesn't seem good for anyone.
The answer on regulation is a mix, then. Some of it has been effective (if only at scaring off potential investor dangers completely), some of it is difficult, some of the response is underwhelming. So far there hasn't been a 2008-scale meltdown because it hasn't been a big enough market to have a domino effect, and I still don't think it is yet, so really now's the time to take preventive measures but it's not too late for that. It is too late to protect all the people who've lost big so far, but that is a much smaller number than those who suffered in 2008. In my opinion the movers and shakers who care about worldwide financial stability are tuning in around the right time and are overwhelmingly accepting that regulation is going to be necessary. I predict the EU and the US will both push some pretty solid efforts soon; EU through explicit regulation, US through maybe some legislation but definitely through better enforcement.