6 ms·

US Treasury to Allow Blockchains, Stablecoins for Bank Payments

51 points by Reedx 6y ago

howlgarnish 6y ago
> the speed, efficiency, interoperability, and low cost associated with these products These are generally not considered features of Bitcoin.
- londons_explore 6y ago
  These will be private blockchains, not the public bitcoin network. They don't really have any benefits over a centralised database except sounding good to management.
  - zalkota 6y ago
    No they will be public blockchains. There is over $2 billion USD currently moving around on ethereum in a stable coins.
  - drchopchop 6y ago
    Exactly, and they have no incentive to make random public stablecoin bagholders rich.
    - tuesdayrain 6y ago
      I can assure you that no one is "bagholding stablecoins" in hopes to become rich.
- janandonly 6y ago
  Have you read anything about Bitcoin upgrades or new second or third layer solutions of the last four years? Liquid is a side chain that works with “blinded” amounts (so you can see a transaction but not an amount) and works with blocks every few seconds. Lightning is another second layer tech that allows transaction within seconds. RGB is a third layer tech on top of Lightning that allows you to create stable coins or other useful banking applications.
- reilly3000 6y ago
  True, but have you see the current state-of-the-art? It’s ACH.
  - nwah1 6y ago
    ACH is free to the user, convenient, safe, well understood, and the energy requirements aren't insane. Any banks foolish enough to process cryptocurrency transactions will have to meet all the same banking requirements for anti-moneylaundering, anti-terrorism, rogue states, etc. These sort of requirements are part of the reason for delays. International transactions can also get delayed because of shoddy foreign banking servers which may simply be down. All of these problems remain, but an additional constraint of requiring consensus and hashing is imposed. This is a version of second system syndrome where even the naive variant doesn't sound good on paper.
    - reilly3000 6y ago
      Agreed that crypto and banking seem like oil and water for the issues you mentioned. ACH is far from safe. The keys are printed on every check, the transactions aren't reversible, the settlement times are practically untenable for business. I've sold and bought payroll services, charged my customers with ACH, paid vendors with ACH, read the gawdawful spec, and I haven't much good to say about it, other than it mostly works, and enough people know it well enough.
      - reilly3000 6y ago
        Further reading for the curious: The official rules: https://www.firstmid.com/wp-content/uploads/2014/02/2013-Corporate-Rules-and-Guidelines.pdf https://www.firstmid.com/wp-content/uploads/2014/02/2013-Cor... https://files.nc.gov/ncosc/documents/eCommerce/bank_of_america_nacha_file_specs.pdf https://files.nc.gov/ncosc/documents/eCommerce/bank_of_ameri... This is the cleanest implementation guide I've ever seen. Its a breeze compared to the former. Fraud issues: https://bankinnovation.net/allposts/focus/comp-reg/ach-is-a-sieve-of-fraud-that-needs-to-be-fixed/ https://bankinnovation.net/allposts/focus/comp-reg/ach-is-a-... A dev's take: https://security.stackexchange.com/questions/85046/what-protections-are-put-in-place-to-prevent-ach-scams https://security.stackexchange.com/questions/85046/what-prot... > Note that ACH was never designed to fullfil the task it's currently used for.
- intotheabyss 6y ago
  They are referring to Ethereum, not Bitcoin.
- ahallock 6y ago
  You understand this is a vast space with many coins and technologies being developed, BTC being only one...
chasemiller 6y ago
This explains the 30% 24hr growth of Stellar. Stellar has been working in this area for years and is built to facilitate exactly these types of transactions. I think they are probably the best positioned to take this on. Also, Stellar USDC support was already slated for February.
- intotheabyss 6y ago
  Pretty sure Ethereum is best positioned for this.
  - deleted 6y ago
    [deleted]
  - _alex_ 6y ago
    USDC runs on ethereum
  - storedbox 6y ago
    Definitely not. Ethereum is on top of the DeFi world, for sure. But DeFi is not CeFi. As an analogy: DeFi is to smart contracts as CeFi is to “dumb” contracts. The legal entity behind Stellar has significantly more of the latter than the entity behind Ethereum--which has none, to my knowledge. ... Plus, gas fees. It's currently cheaper to wire money than to send some ETH.
    - zippoxer 6y ago
      > Plus, gas fees. It's currently cheaper to wire money than to send some ETH. Wrong. If all you wish for Christmas is to send some ETH, look no further than into ZK-Rollups such as zkSync & Loopring. 1) A transfer costs around $0.01 in fees. 2) ZK-Rollups are not sidechains. These are layer 2 solutions that settle on Ethereum with a novel trust model of 1-of-N: you only need to trust that a single node is honest! 3) Exchanges (such as Coinbase) would eventually support depositing/withdrawing to a rollup, which means most folks would never need to interact the expensive base layer directly. Sending money across countries has never been cheaper, faster & as secure as it is now on an Ethereum ZK-Rollup.
donaldcuckman 6y ago
Pretty sure this is to get ready for "diem" the new no longer facebook blockchain "libra"
WealthVsSurvive 6y ago
Replacing a currency beholden to people through government, fiat, namely world-reserve USD, with one that is beholden only to who owns it and who owns the most cutting-edge computing power, what could possibly go wrong?

51 points by Reedx 6y ago

> the speed, efficiency, interoperability, and low cost associated with these products These are generally not considered features of Bitcoin.

londons_explore 6y ago
These will be private blockchains, not the public bitcoin network. They don't really have any benefits over a centralised database except sounding good to management.
- zalkota 6y ago
  No they will be public blockchains. There is over $2 billion USD currently moving around on ethereum in a stable coins.
- drchopchop 6y ago
  Exactly, and they have no incentive to make random public stablecoin bagholders rich.
  - tuesdayrain 6y ago
    I can assure you that no one is "bagholding stablecoins" in hopes to become rich.
janandonly 6y ago
Have you read anything about Bitcoin upgrades or new second or third layer solutions of the last four years? Liquid is a side chain that works with “blinded” amounts (so you can see a transaction but not an amount) and works with blocks every few seconds. Lightning is another second layer tech that allows transaction within seconds. RGB is a third layer tech on top of Lightning that allows you to create stable coins or other useful banking applications.
reilly3000 6y ago
True, but have you see the current state-of-the-art? It’s ACH.
- nwah1 6y ago
  ACH is free to the user, convenient, safe, well understood, and the energy requirements aren't insane. Any banks foolish enough to process cryptocurrency transactions will have to meet all the same banking requirements for anti-moneylaundering, anti-terrorism, rogue states, etc. These sort of requirements are part of the reason for delays. International transactions can also get delayed because of shoddy foreign banking servers which may simply be down. All of these problems remain, but an additional constraint of requiring consensus and hashing is imposed. This is a version of second system syndrome where even the naive variant doesn't sound good on paper.
  - reilly3000 6y ago
    Agreed that crypto and banking seem like oil and water for the issues you mentioned. ACH is far from safe. The keys are printed on every check, the transactions aren't reversible, the settlement times are practically untenable for business. I've sold and bought payroll services, charged my customers with ACH, paid vendors with ACH, read the gawdawful spec, and I haven't much good to say about it, other than it mostly works, and enough people know it well enough.
    - reilly3000 6y ago
      Further reading for the curious: The official rules: https://www.firstmid.com/wp-content/uploads/2014/02/2013-Corporate-Rules-and-Guidelines.pdf https://www.firstmid.com/wp-content/uploads/2014/02/2013-Cor... https://files.nc.gov/ncosc/documents/eCommerce/bank_of_america_nacha_file_specs.pdf https://files.nc.gov/ncosc/documents/eCommerce/bank_of_ameri... This is the cleanest implementation guide I've ever seen. Its a breeze compared to the former. Fraud issues: https://bankinnovation.net/allposts/focus/comp-reg/ach-is-a-sieve-of-fraud-that-needs-to-be-fixed/ https://bankinnovation.net/allposts/focus/comp-reg/ach-is-a-... A dev's take: https://security.stackexchange.com/questions/85046/what-protections-are-put-in-place-to-prevent-ach-scams https://security.stackexchange.com/questions/85046/what-prot... > Note that ACH was never designed to fullfil the task it's currently used for.
intotheabyss 6y ago
They are referring to Ethereum, not Bitcoin.
ahallock 6y ago
You understand this is a vast space with many coins and technologies being developed, BTC being only one...

chasemiller 6y ago

This explains the 30% 24hr growth of Stellar. Stellar has been working in this area for years and is built to facilitate exactly these types of transactions. I think they are probably the best positioned to take this on. Also, Stellar USDC support was already slated for February.

intotheabyss 6y ago
Pretty sure Ethereum is best positioned for this.
- deleted 6y ago
  [deleted]
- _alex_ 6y ago
  USDC runs on ethereum
- storedbox 6y ago
  Definitely not. Ethereum is on top of the DeFi world, for sure. But DeFi is not CeFi. As an analogy: DeFi is to smart contracts as CeFi is to “dumb” contracts. The legal entity behind Stellar has significantly more of the latter than the entity behind Ethereum--which has none, to my knowledge. ... Plus, gas fees. It's currently cheaper to wire money than to send some ETH.
  - zippoxer 6y ago
    > Plus, gas fees. It's currently cheaper to wire money than to send some ETH. Wrong. If all you wish for Christmas is to send some ETH, look no further than into ZK-Rollups such as zkSync & Loopring. 1) A transfer costs around $0.01 in fees. 2) ZK-Rollups are not sidechains. These are layer 2 solutions that settle on Ethereum with a novel trust model of 1-of-N: you only need to trust that a single node is honest! 3) Exchanges (such as Coinbase) would eventually support depositing/withdrawing to a rollup, which means most folks would never need to interact the expensive base layer directly. Sending money across countries has never been cheaper, faster & as secure as it is now on an Ethereum ZK-Rollup.

donaldcuckman 6y ago

Pretty sure this is to get ready for "diem" the new no longer facebook blockchain "libra"

WealthVsSurvive 6y ago

Replacing a currency beholden to people through government, fiat, namely world-reserve USD, with one that is beholden only to who owns it and who owns the most cutting-edge computing power, what could possibly go wrong?