Hey Jesstablecoiners
As the traditional economy continues to break apart, anyone who has any creativity and trying to provide solutions that conflict with the government is going to get squeezed. Governments want to be the only game in town, as they help create monopolies in tonnes of sectors, they too intend to have a monopoly—the greatest monopoly of all, the monopoly of money.
Stable coins have been a revelation regardless of how you feel about them and the drama surrounding projects like USDT. They've made it far easier to transact and get in and out of positions and provide an easy way to purchase goods and services with a medium many are willing to accept.
The appeal of stable coins
Stable coins also bypass a lot of banking regulation and allow for anyone around the world to own USD, which isn't as easy as you may think, should you be living outside the US. USD can be a freaking lifesaver if you're in a country with a rubbish currency like Lebanon or Venezuela.
However, getting anything done through banks isn't going to satisfy enough people which is why USDT and it's the use of various blockchains from ETH, BNB To TRON allow anyone to get into a stable coin/currency game with relative ease.
I've spoken about the various versions of stable coins in the past, so I am not going to go into it but only focus on physically-backed stable coins.
Also read
These are coins issued and managed by a custodial service that holds 1 government greenback for every digital dollar they issue; they need to maintain the 100% backing at all times. As coins are minted they add dollars to their reserve, as dollars are removed, so too an equal amount of coins need to be burned.
You can probably tell that this can easily become a cock-up of fractional reserve money printing, but that's a story or another day. Anyhoo, the good old US and A, are looking at pushing out another turd, I mean the congressional bill would require stablecoin issuers to secure bank charters.
Siding with institutions
As you can probably tell this is not exactly a law designed to help the people; these companies are offering a service and people are using them of their free will knowing the risks. But a banking charter would mean "additional" safety measures and "consumer protection". This is the trojan horse they built to ram the obvious nepotism right up your little poop shoot.
When in fact its obvious nepotism and control, these charters would favour a certain JPM coin, create a barrier to competition, make tracking and taxing easier, confiscation and on top of all that it can help force compliance such as KYC.
Innovation cannot be regulated
I personally wouldn't use a JPM coin, I hardly use stable coins as it is, but I can see the value and use in having it made part of the blockchain sector. I do think, however, that backed stable coins have now cut themselves off at the knees and have opened up the way for algorithmic stable coins to thrive.
If this regulation goes through it taints the backed stable coin model, and those who were already on the fence would happily toss those in favour of coins backed by the chain and the market, not the government.
As more liquidity flows into Bitcoin and ETH, it only increases the ability to mint stable coins and grow the market, in fact, the regulation of stable coins could mean that algorithmic stable coin needs improve. To increase the minting of algorithmic stable coins, the backed asset like ETH, BTC, Maker al need to improve liquidity and thus increase in value.
We've already seen platforms like CURVE trying to assist with liquidity and maintaining the peg of various stable coins through a basket of assets. I am sure if more liquidity flows out from backed to algorithmic, it can only assist these platforms and push users deeper into unregulated stable coins.
Perhaps I am TOO bullish, but I feel that every time governments try to regulate crypto, they only push the market to come up with better solutions.
They're effectively speeding up the growth by trying to harm the sector; the attacks will only continue as the market cap of BTC rises and drag crypto along with it, so I expect a few more shots from the state before they admit defeat.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
Let's connect
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Posted Using LeoFinance Beta
Stable coins are very useful in many ways as the value of coin does not fluctuate... but I am curious about how they can backed stable coin with equal amount of USD without any regulations... 🤔
So they do this with a basket of assets or a single asset, you could take a certain amount of ETH or BTC and then over collateralise it, let's say you have 1 ETH that's around $600 and you can lock it up and get $300 in stable coins to be used as you please. the platform gets your ETH, you get the coins, and when you pay it back you can get your ETH back
This is the dance, isn't it?
Their regulation versus the innovation of the techie/financial people. We know regulations exists to protect the incumbents. They use their power and might to influence the politicians, who are nothing more than puppets.
So the great race is on. Do they actually add more value each time they attack? Hard to tell. But whatever they do, it does seem there is a counter measure by the industry. Innovation, open source, and global development are impossible for one country, or even a few countries to stop.
Ultimately, as long as one allows it to take place, it will. This will cause it to spread.
As for your question, forking stable coins, if that can be done, it should be. The more that is out there before the regulators get going, the better.
We should create a million different tokens just so they exist. We can decide whether they are needed or not at a later date.
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I don't think you can win against a HIVE mind especially when it continues to attract capital, now you're a HIVE mind of well-funded individuals and what seems to be is you feed it by attacking it you FUD capital into the strongest hands, and they form the base that converts the others and allocates the capital to the best solutions.
It's actually brilliant to watch it all take place in real-time. I agree, I mean we as HIVE users have a community with our own stable coin and we find ways to use it, I can't see why other communities won't do the same
Stable coins are real life saver for many specially those where currency are devaluing every other day.
Actually I see getting paid in stable coin makes more sense instead of BTC,ETH etc.
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I would agree with you there, I think being paid in a stable coin would be great then it makes it easier to convert my salary into Bitcoin which is what I want, but for most people, they can keep their coins and then move it to fintech companies that give them he best return if they don't like BTC volatility
it's also quite useful for companies or small businesses to use in the form of accepting crypto payments, as they don't have taxes in most cases and it's stable :P
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You will still have to pay taxes if you're a formal business though, like VAT depending on the country you in, stable coins are also subject to the inflation of the pegged asset so you're losing purchasing power and finally once you would still pay income tax.
for an informal market in Africa for example, yes your way would work since it would just replace physical cash in those markets
hehe there are so many businesses in Greece for example that act "informally" :p
i had forgotten about vat though!
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And I don't blame the greeks at all for doing so, Brussells and the banking system fucked them over big time, why should they pay VAT and reward people who ruined the economy
exactly, someone who acknowledges the situation!
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It is not legal to hold USD in my country, Myanmar.
In ATM, VISA or Myanmar Payment Union Card of my country, we can transfer or buy with USD the products from Other countries. But, we can't receive USD from foreign countries by using this cards.
We can send and receive USDT, the stable coin, by using Exchange Wallet on Mobile phone. That is very good for me who want to earn Online money.
Thank for sharing!
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that's very cool, here you can have a forex account attached to your bank account but not many people have it. You can have paypal but you're not allowed to keep the money in there for longer than 60 days, they want to force most people back into local currency if possible.
You can buy physical dollars also and keep it with you but you cannot buy with it, no foreign currencies are really accepted by merchants here.
Now imagine if there were a few hundred different "stablecoins" tied to many different assets classes.
You could easily bypass that regulation from your government.
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Yes, I use to pass Rule and Regulation of my Government by using Help of my believed friends.
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Crypto-backed stablecoins for the word. I don't like custodial stablecoins anyway because they're not trustless. Crypto-backed stablecoins can be a real lifesaver for people in countries whose currencies are crap.
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I would agree with you, but I think custodial coins do have a use case and it does help stabilise algorithmic stable coin market too. I agree stable coins are a life saver for many countries, South Africa's currency is pretty rubbish so I know the value a dollar can bring