Comment by awesome_dude
1 day ago
Yeah - there's no real advantage to crypto, even less so for a stable coin (it really seems to be someone /trying/ to make crypto look legitimate, with absolutely no reason to buy.
Here's how a buyer of the coin should see it - I have 1 USD and I can put that money into a bank, into my pocket, or under my bed mattress.
If I buy a crypto stable coin.. I can hope that the coin doesn't fall over (as others have), and, uhhhh, that's about it.
The owner of the stable coin might be able to trade it with someone else, for goods or services, but the only reason either party would switch from the fiat currency to the crypto is to avoid regulation, whether that be because the goods/services are controlled, or because the transfer of money is controlled.
Any thought of "investing" the dollar into the "stable" coin is void, because it's a stable coin that's supposedly fixed to the value of the dollar, one goes in... one comes out
Payment of interest for holding the dollar, that's regulated, and the risk of the coin disappearing, or being shut down by the feds means that the reward would have to be high to make it worthwhile (IMO)
Cross border payments with stable coin is way easier and faster than with USD. When crypto is in a bull cycle demand for stable coins raise as short term interest, sometimes up to 50%/year (for a few hours or a day). Stable coins generate yield for their operators, they won’t run with your money due to the same reasons why a bank CEO won’t.
> Cross border payments with stable coin is way easier and faster than with USD.
Only when it's because the other methods are highly restricted.
I make cross border payments quite regularly, and it's cheaper, faster, and safer, using the regulated systems (denominated in fiat currency).
> When crypto is in a bull cycle demand for stable coins raise as short term interest, sometimes up to 50%/year (for a few hours or a day).
And, pray tell, what happens when the reverse happens, and a death spiral begins?
> Stable coins generate yield for their operators, they won’t run with your money due to the same reasons why a bank CEO won’t.
From Wikipedia: Tether's USDT is currently the world's largest market capitalization stablecoin. Tether initially claimed their stablecoin is fully backed by fiat currency. However, in October 2021, it failed to produce audits for reserves used to collateralize the quantity of minted USDT stablecoin.[44] Tether were fined $41 million by the Commodity Futures Trading Commission (CFTC) for deceiving consumers.[45] The CFTC found that Tether only had enough fiat reserves to guarantee their stablecoin for 27.6% of the time during 2016 to 2018. Since then, Tether began issuing assurance reports on USDT backing, although some speculation persists regarding the use of Chinese commercial paper for reserves.[46] As at March 2025, Tether had never completed an audit by an accounting firm.
Edit: The reason that crypto is most often presented as an alternative is because it's "Not regulated"
The reason I have faith in a fiat currency, and not crypto (of any kind) is the regulation - the handlers are regulated, the way that the banks invest the money that they hold is (supposed to be) regulated.
When banks have had the regulations on how they can use the money they hold relaxed is what has caused the last two DEPRESSIONS - 1930s, and 2010s (GFC)
There's zero advantage to use crypto except, as stated before, when the goods/services being exchanged are restricted, or the cross border trading is restricted.
Those border trades, you're dealing with countries where the banking system has failed (because the government has failed), or you are at risk of breaking sanctions or financing terrorism.
Edit: Used restricted where I'd previously used the word regulated to try and make the point clearer
> And, pray tell, what happens when the reverse happens, and a death spiral begins?
Interest drops to 1%, nothing else. We talk about USDC on Kraken or Coinbase, both regulated by SEC, FINRA and having ATS license (only 50 such licenses granted in US).
> I make cross border payments quite regularly
This is easy only between very few countries. Try Africa, India, former Soviet republics. You can send them money, they might not be able to receive.
> Tether's USDT is currently the world's largest market capitalization stablecoin…
This is why I only talk about USDC and others, not Tether.
> The reason I have faith in a fiat currency, and not crypto (of any kind) is the regulation
Stable coin is a different form of fiat operated by a regulated institution. They actually much more regulated compared to banks. For instance, they cannot use fractional reserves, everything must be 1-1 backed by cash equivalents (bonds and friends).
> There's zero advantage to use crypto
Wire cost me $27, USDC transfer cost $1. Wire takes 1-2 days, USDC transfer - 15 seconds. I can get 2-10% interest on my crypto holdings without any commitments, I can make 0.5% with savings account or 3% if I commit to a yearly deposit. I cannot get USD nominated debit card, but can from a crypto exchange. So on and so forth. Life is easy when you are a US Citizen, much different if you come from Russia, Iran, India, most of Africa, most of the world, really.
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