5 ms·

"Stablecoin" in general generates a ton of legal risk for the operators. If you can make peer-to-peer transactions with it, then the coin operators are definit

"Stablecoin" in general generates a ton of legal risk for the operators. If you can make peer-to-peer transactions with it, then the coin operators are definitely not complying with Know Your Customer and Anti-Money Laundering laws. This will pretty reliably get the US Feds to raid your offices, seize your website and servers, arrest the principles responsible, and prosecute them. See also: Liberty Reserve. On the other hand, if you can't make peer-to-peer transactions with it, it's basically a "blockchain" in name only. There's little advantage over traditional bank account systems. Maybe the programmability and verifiability helps? I just don't see that sort of thing doing a lot compared to the whole money-laundering use case, though.

lacker 8y ago
If you can make peer-to-peer transactions with it, then the coin operators are definitely not complying with Know Your Customer and Anti-Money Laundering laws. You can certainly make peer-to-peer transactions with it. But I think you are misinterpreting the KYC laws. Circle (who operates USDC) isn't trying to be secretive about this. They are regulated as a "money transmitter" and a "money services business" - https://www.circle.com/en/usdc https://www.circle.com/en/usdc . IANAL but Circle certainly seems prepared to take on any legal risks involved here.
- ThrustVectoring 8y ago
  If I was working at that company I'd be sending out my resume and looking for alternatives.
- vkou 8y ago
  When I cash out $50 worth of USDC, how will Circle know that I'm not laundering drug money?
  - vntok 8y ago
    Check the blacklists.
werds 8y ago
I'm pretty sure a company like Coinbase which is worth $1.6 Billion did their due diligence on the legalities.
- austenallred 8y ago
  Not that it matters, but Coinbase is worth way more than $1.6 Billion
antpls 8y ago
> Maybe the programmability and verifiability helps? USDC seems to be more about smart contracts than crypto currency as envisioned by the early adopters. Programmability and verifiability alone of the "old money" could open new applications, new experimentations, new use cases. It's definitely a nice initiative IMHO. It looks like an intermediate step, or another variation, to get more people interested into digitalization.
quickthrower2 8y ago
Also tax evasion. A semi-anonymous store of cash. You could earn some money doing a gig, then go abroad and spend it on holiday (withdraw from ATM or whatever). You can do that with non-stable coins too, but this would be more attractive due to the predictability of it's value. All the while Coinbase make money off the never-ending interest. And one day they may go fractional too.
omarforgotpwd 8y ago
I go to the company and give them a dollar. They cryptographically sign over to me a digital Chuck E. Cheese token of sorts that I can cryptographically sign over to someone else. Just like I can do whatever I want with Chuck E. Cheese tokens, I can circulate my USDC around and do whatever with it. Then at some point in the future someone goes to the company and says hey I want a dollar. He signs the token over to them and they validate that it traces back to the dollar I gave them. They give the dollar to the other guy, presumably after fulfilling KYC requirements. So really they only need to KYC the buyer and the seller. Everything that happens in between is not really their business. It's not really anything really. Just a bunch of people doing cryptographic signatures and publishing them online.
- tomp 8y ago
  > presumably after fulfilling KYC requirements A part of KYC regulations is often also the question, "how did you get the money". So > Everything that happens in between is not really their business. is probably not true.

lacker 8y ago

If you can make peer-to-peer transactions with it, then the coin operators are definitely not complying with Know Your Customer and Anti-Money Laundering laws. You can certainly make peer-to-peer transactions with it. But I think you are misinterpreting the KYC laws. Circle (who operates USDC) isn't trying to be secretive about this. They are regulated as a "money transmitter" and a "money services business" - https://www.circle.com/en/usdc https://www.circle.com/en/usdc . IANAL but Circle certainly seems prepared to take on any legal risks involved here.

ThrustVectoring 8y ago
If I was working at that company I'd be sending out my resume and looking for alternatives.
vkou 8y ago
When I cash out $50 worth of USDC, how will Circle know that I'm not laundering drug money?
- vntok 8y ago
  Check the blacklists.

werds 8y ago

I'm pretty sure a company like Coinbase which is worth $1.6 Billion did their due diligence on the legalities.

austenallred 8y ago
Not that it matters, but Coinbase is worth way more than $1.6 Billion

antpls 8y ago

> Maybe the programmability and verifiability helps? USDC seems to be more about smart contracts than crypto currency as envisioned by the early adopters. Programmability and verifiability alone of the "old money" could open new applications, new experimentations, new use cases. It's definitely a nice initiative IMHO. It looks like an intermediate step, or another variation, to get more people interested into digitalization.

quickthrower2 8y ago

Also tax evasion. A semi-anonymous store of cash. You could earn some money doing a gig, then go abroad and spend it on holiday (withdraw from ATM or whatever). You can do that with non-stable coins too, but this would be more attractive due to the predictability of it's value. All the while Coinbase make money off the never-ending interest. And one day they may go fractional too.

omarforgotpwd 8y ago

I go to the company and give them a dollar. They cryptographically sign over to me a digital Chuck E. Cheese token of sorts that I can cryptographically sign over to someone else. Just like I can do whatever I want with Chuck E. Cheese tokens, I can circulate my USDC around and do whatever with it. Then at some point in the future someone goes to the company and says hey I want a dollar. He signs the token over to them and they validate that it traces back to the dollar I gave them. They give the dollar to the other guy, presumably after fulfilling KYC requirements. So really they only need to KYC the buyer and the seller. Everything that happens in between is not really their business. It's not really anything really. Just a bunch of people doing cryptographic signatures and publishing them online.

tomp 8y ago
> presumably after fulfilling KYC requirements A part of KYC regulations is often also the question, "how did you get the money". So > Everything that happens in between is not really their business. is probably not true.