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Why not use a stablecoin? Or are they dealing with Bitcoin volatility in another way?
by TenJack 5y ago
Why not use a stablecoin? Or are they dealing with Bitcoin volatility in another way?
- Ancapistani 5y agoWhat advantage would a stablecoin have over using the underlying currency directly? It has the significant disadvantage of adding an additional trust entity (the backing bank) which could prove untrustworthy. Over a long enough timescale, I would argue that all backing banks have proven to be untrustworthy.
- TenJack 5y agoDoesn’t it seem concerning to tie a countries currency to something so volatile that it could literally halve over night? Not trying to argue. Just trying to understand.
- cwkoss 5y agoFiat currencies can go to zero in an instant via political changes. (Ex, see indian demonitization in 2016). All forms of money have risks. I think the diversification of supporting BOTH USD and BTC seems to get a bit of the best of both worlds.
- TenJack 5y agoRight so why not USD coin instead of Bitcoin?
- cwkoss 5y agoUSD-pegged stablecoins kind of have the worst of both worlds - the risks of crypto AND the risks of fed monetary policy. Stablecoins shouldn't be used as a store of value, only as a medium of exchange.
- TenJack 5y agoYou just said having USD was part of the best of both worlds (despite fed monetary policy) and Bitcoin has the risk of crypto as well. Seems contradictory
- cwkoss 5y agoUSD and Bitcoin each have risks and disadvantages. USD-denominated stablecoins have the union of the risks and disadvantages of both.