Comment by FabHK
6 hours ago
Arguably any fiat-collateralised stablecoin is ipso facto centralised and trusted (someone needs to 1) issue the coins only against fiat collateral and then 2) hold onto that collateral reliably and 3) return it upon presentation of the coin), and at step 3 they can always say "no, we won't give it to you".
Your point has nothing to do with fiat.
It applies equally well to a fiduciary coin with a promise that 1 gcoin = 1g of gold or whatever.
Indeed.
However, it does not necessarily apply to algorithmic stable coins (Terra) or crypto-backed overcollateralised coins (DAI). That's why I said "fiat-backed".
Why couldn't a privacy focus coined, like Monero, be a stablecoin?
You don't need to see where the coins are and move to promise $1 of going for every coin.
Probably the founders/employees of the company issuing/redeeming the token would be arrested very quickly. Tornado Cash people got arrested for much less.
How are you guaranteeing that your private stablecoin will keep its $1 value?
How are you bootstrapping a network to validate private transactions without the promise of potential gains in coin value as its popularity takes off?
Who makes that promise? That's who you are ultimately trusting.