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The solution to tether existing is for the US government to release a fiat convertible cryptocurrency pegged to $1 with all of the compliance of traditional ban
by josh2600 8y ago
The solution to tether existing is for the US government to release a fiat convertible cryptocurrency pegged to $1 with all of the compliance of traditional banking. Financial institutions would use it, the government could tax it, and all of the kyc/aml could be enforced. It’s not even hard to do.
Until that happens, there’s a rational economic narrative for companies of all shapes and sizes to offer these kinds of synthetic dollar-like instruments (and it will also remain rational for regulators to be interested in these enterprises).
It’s an interesting time to observe this market (I guess crypto will be interesting for a while).
Edit: I guess it's impossible to have a nuanced discussion about cryptocurrency on HackerNews right now. For those of us who have participated in these markets from an institutional level, there are obvious reasons why these synthetic instruments exist beyond evading regulatory controls (which is why Coinbase, who is the most regulatory compliant entity in the industry has a synthetic dollar instrument). There are real technical advantages to having a synthetic instrument that go far beyond regulatory evasion, just ask anyone who operates a regulatory compliant entity in this industry.
- barkingcat 8y agoYah this won't work. The only reason people want crypto currency (especially of the tether type) is that it's based in a non-extradition territory, with no US government oversight and taxation. The lure of Tether is all the (fake) value with none of the taxes or the governmental stuff.
- gowld 8y agoWhat's the use case for that? If that was acceptable to any user, wouldn't they just use regular electronic money?
- Scoundreller 8y agoIf you want to move dollars between 2 exchanges in different parts of the world, it’s a pain to do by wire. Some exchanges only deal in crypto. It kinda makes sense: you want to sell barfcoin but it’s only traded at an exchange in Elbonia. So deposit your barfcoins to the Elbonian exchange, trade it for a stablecoin, then move your stablecoin to a local exchange and trade for your local currency.
- dmitriid 8y agoYou somehow failed to provide a use case for a government-backed "stablecoin".
- Scoundreller 8y agoI never said there was or wasn’t one for a gov-coin.
- dmitriid 8y agoYour answer was to this comment: —— quote —— What's the use case for that? If that was acceptable to any user, wouldn't they just use regular electronic money? —— end quote —— And somehow you failed to answer either question
- Blackthorn 8y agoTether exists at all because exchanges don't want to follow regulations around USD. A government-approved fiat convertible cryptocurrency wouldn't change that.
- Animats 8y agoTether exists because Bitcoin "exchanges" (who are really broker/dealers) are so bad at paying out USD. If I sell stocks via my US broker and tell them to wire transfer the proceeds to my bank, the money shows up the next day. Sometimes the same day. Try to find any crypto "exchange" that does that.
- tim333 8y agoKraken do if you are "pro verified" (proof of residence, id,kyc) https://support.kraken.com/hc/en-us/articles/360001461846-Introducing-High-Limit-USD-Funding- https://support.kraken.com/hc/en-us/articles/360001461846-In...
- Scoundreller 8y agoexchanges would love to be able to do that, but can’t if they get cutoff from the banking system at every turn.
- FireBeyond 8y agoIn many cases they're being cut off because their standards for KYC/AML are lax to non-existent, or they don't have money transmitter licenses.
- Scoundreller 8y agoSeems like a best case scenario. Either all exchanges have KYC/AML problems (possibly) or a lot of banks think of crypto like my school librarian did about the internet in the 90s: it’s all bad because anyone can publish with it.
- nostrademons 8y ago
- cycrutchfield 8y ago>It’s an interesting time to observe this market (I guess crypto will be interesting for a while). If by interesting you mean comedy godl, then sure.
- tim333 8y agoThe whole point of tether is that "all of the kyc/aml" is not enforced.
- Scoundreller 8y agoWhat does that have to do with Tether? Isn’t that the exchange’s responsibility?
- PeterisP 8y agoIt has everything to do with Tether because that's the main use case of Tether - if an exchange won't or can't meet the KYC/AML requirements, they can't pay out USD, but they can pay out Tether. For people and exchanges who can use USD, Tether has limited use; there are some scenarios but the bulk of Tether demand is for exchanges and crypto deals where business can't be done in USD.
- tim333 8y agoDepends where the exchange is located. The iffy ones seem to legally have the exchange in some tax haven, an office some place else, actual staff at undisclosed locations and ignore kyc. If you have to have a fiat bank account then you can't really do that or at least have problems like Bitfinex have had. Bitfinex/tether have the reputation of accepting iffy/laundered funds.