3 ms·

In what ways are stablecoin issuance similar to traditional banking services?

• geofft 6y ago
  In what way is it not? You put some dollars in them and you get some variable set to a value somewhere. (In traditional banking, the value is the number of dollars you put in, and it might be stored on a computer or perhaps on paper; with a stablecoin, it's a cryptographic capability and it's hopefully stored on your machine.) You can then either request that the service transfer some of that value to / from other people, or ask for your dollars to come back out at a later point. Furthermore, while the entity you've given the dollars to promises you can ask for them back (plus/minus any transfers you've arranged with others) at any point, there's no guarantee that they have a bag of dollar bills in a hole in the ground somewhere, and in fact they probably don't: they're almost certainly doing something with the dollar bills to make themselves money, in a way where they preserve enough liquidity to return dollars for the people who ask for them, but not all at once. The only difference is the technical form of the variable associated with your account. The API and the social purpose is the same.