Regulators should treat stablecoins like banks • Hacker News Board

Re: Regulators should treat stablecoins like banks

#221

Post by FabHK » Thu, Aug 12, 2021, 2:30 PM UTC

jbgt wrote: post #180

Zamicol wrote: post #74

Firstly, Tether is rat poison. Unfortunately, newcomers to the space identify "stable coins" = "tether" or wrongly assume that other stablecoins share similar mechanisms. There are many alternatives that operate radically differently in the nascent space. DAI is immensely exciting. Stablecoins like DAI are interesting experiments that could powerfully create new online economies. Blockchains like Ethereum are current…

If you think DAI is exciting, check out Liquity : it's entirely managed by smart contracts and economic mechanisms, with no governance managing interest rates like with Maker. One Explainer video with the founder: https://www.youtube.com/watch?v=bXLTE-5BkhA I think DeFi is really getting interesting.

A bulletproof algorithmic stable coin like IRON (dropped to $0.70) and SafeDollar (dropped to zero)?

https://rekt.news/safedollar-rekt/

https://rekt.news/iron-finance-rekt/

Re: Regulators should treat stablecoins like banks

#222

Post by CryptoPunk » Thu, Aug 12, 2021, 6:23 PM UTC

emn13 wrote: post #212

CryptoPunk wrote: post #199

Earlier quoted context omitted.

>>Having a bunch of private actors potentially run a huge experiment in which the economic fallout will not be born by them if it goes sideways is entirely unreasonable The experiment is entirely opt in, with no one being affected that does not choose to be.

Of course its not; no more than the 2008 financial crisis was entirely opt in. Individuals do not have the opportunity to fully control all aspects of the financial system they're exposed to.

Individuals fully control whether they interact with the financial system at all, and if they do, which parts they are exposed to.

The risk posed by any financial asset is not distributed uniformly across the economy. Its impact on any party is proportional to their direct and indirect exposure to that asset, which is something that they control and have to take responsibility for.

Re: Regulators should treat stablecoins like banks

#223

Post by tptacek » Thu, Aug 12, 2021, 6:58 PM UTC

SilasX wrote: post #135

JumpCrisscross wrote: post #52

Earlier quoted context omitted.

> interest bearing accounts on the stablecoins are the (edit: things analogous to) MMFs, not the stablecoins themselves Sorry, I was speaking metaphorically. Stablecoins are collateralized by money market assets. This backs their "guarantee" of convertibility. Money market funds used to provide a similar liquidity-risk transformation guarantee--they would never "break the buck," i.e. trade for less than $1/unit. Unti…

No, I don't see the "rhyme" about how USDC and GUSD lack actual cash to back them 100%, because they do in fact have such cash. Bottom line, you're painting with too broad a brush to say all stablecoins work like a MMF. At most, you're describing particular ones like Tether and Dai.

USDC does not have actual cash to back it to 100%.

Re: Regulators should treat stablecoins like banks

#224

Post by marcosdumay » Fri, Aug 13, 2021, 6:57 PM UTC

beiller wrote: post #209

marcosdumay wrote: post #186

Earlier quoted context omitted.

> But companies are not paying Fitch to rate them are they. They often are. A lot of times a large investor pays them to look at a possible investment, and this case is quite ok. But the official ratings they are listed with are set by a third party mandating the company "go pay Fitch to rank you". It's not plain bribery like companies paying reviewers, but it's quite shady.

I understand what you're saying but ultimately it's still the investors paying Fitch. You can clearly see they have no quid pro quo with the company or product they are evaluating. All your saying is who's invoice the bill appears on but the company is not paying that bill. The investor pays through the acquisition.

There is no investor at this point. The mandate is made by a 3rd party that is expected to be neutral. The investor only appears after the entire thing is settled.

Yes, it's not a case of fraud. It's a case of a process structured in a way that facilitates fraud. (Who pays for the invoice has the power to negotiate its value.) It is a very different thing, but it's still a problem to be solved.