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As I see it, the federal reserve official's statement really boils down to the fact that if Tether (or any other widely adopted stablecoin) is conventionally ac
by mightybyte 5y ago
As I see it, the federal reserve official's statement really boils down to the fact that if Tether (or any other widely adopted stablecoin) is conventionally accepted to have the value of $1 USD, and the people running Tether can print them, then those people can effectively print USD. And THAT, from the Fed's perspective, is a risk to financial stability.
If I was the Fed I would seriously consider creating my own TheRealUSD stablecoin. Create a token that you have mint/burn control over, and create a portal that allows people to exchange USD for the stablecoin and the stablecoin for USD. No doubt a number of the crypto-libertarians out there will not trust that thing and might object to using it. But from the other perspective which would you trust more? A USD stablecoin run by some random collection of tech people? Or a USD stablecoin run by the Fed?
- LarryEt 5y agoWhat would the point of a FED created USD stablecoin be over USD? People act like you have to take gold bars to the grocery store to make exchanges as opposed to just using your bank card and electronically settling up in USD.
- mightybyte 5y agoThe point would be to provide a more legitimate USD stablecoin in a space that seems to be attracting a growing user base (blockchains). I imagine a significant share of the market would choose the Fed-provided stablecoin over any of the non-Fed competitors. If you're using US Dollars in the first place you're already inherently trusting the Fed, so it shouldn't be a much bigger leap to also use their blockchain-based version. This would reduce the degree to which Tether and others are "a challenge to financial stability" because it puts mint/burn powers of the dominant USD stablecoin squarely back in the control of the Fed.