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So convert the USDC to dollars and withdraw the dollars. Done.

graeme 5y ago
In the event Tether busts, the entire crypto markets will freeze up, and it’s plausible usdc will not be redeemable or face a run. USDC aren’t dollars and have been opaque about their backing. The bulk of their assets are in “cash and cash equivalents” which sound good, except they include less than 90 day commercial paper here! They also don’t state its quality or say how much of their cash/equivalents are CP rather than cash or treasuries. Never been audited, only attestations
- rdtwo 5y ago
  Yeah but where do they run to? I could see dark money having to run into BTC and ETH because real dollar redemption is a problem if you operate out of China for example.
  - graeme 5y ago
    A run means “run on the bank” where you go to Circle and ask to trade in your USDC for dollars.
- jkhdigital 5y ago
  It’s called leverage. Every player in the financial system uses it; some have cut deals with the government to socialize catastrophic losses so we pretend the leverage doesn’t exist but there it is. As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. Can’t say the same for Tether.
  - jcranmer 5y ago
    > As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. And what happens if Coinbase were unable to convert all the USDC because the demand exceeded their stockpile of USD?
    - usrusr 5y ago
      Likely some very accidental network misconfigurion, we apologize for the inconvenience?
NelsonMinar 5y ago
Like I said, USDC is not dollars. If you're betting on Tether collapsing you sure as hell aren't going to take payment on that bet in USDC.
- X6S1x6Okd1st 5y ago
  They're different organizations, few people seriously think that USDC is going to 0.
  - jkhdigital 5y ago
    And USDC can be converted back into actual dollars, on demand, not via a market transaction but literally a 1:1 conversion, through a variety of exchanges. You cannot say the same of Tether.
- TacticalCoder 5y ago
  USDC is backed by Coinbase (USDC are issued by Centre, a joint venture of Coinbase and Circle if I'm not mistaken). And Coinbase is an HN unicorn. Everybody at Coinbase is known, it's operated from the US. Coinbase ain't anywhere, not even remotely, like tether/bitfinex. There totally exists a world in which USDT goes to 0 while USDC is still worth 1 USD.
  - endisneigh 5y ago
    So your logic is that big, known entities can’t go bankrupt or be scams?
    - jkhdigital 5y ago
      No, the logic is that it is less likely. Anyways, Coinbase allows on-demand conversion of USDC to USD so you really only have to hold the USDC (and Coinbase’s counterparty risk) for about a day for that process to complete. At some point that window might close but given that Coinbase is a publicly traded stock in the US and must report financials, there is quite a bit less risk compared to Tether.

In the event Tether busts, the entire crypto markets will freeze up, and it’s plausible usdc will not be redeemable or face a run. USDC aren’t dollars and have been opaque about their backing. The bulk of their assets are in “cash and cash equivalents” which sound good, except they include less than 90 day commercial paper here! They also don’t state its quality or say how much of their cash/equivalents are CP rather than cash or treasuries. Never been audited, only attestations

rdtwo 5y ago
Yeah but where do they run to? I could see dark money having to run into BTC and ETH because real dollar redemption is a problem if you operate out of China for example.
- graeme 5y ago
  A run means “run on the bank” where you go to Circle and ask to trade in your USDC for dollars.
jkhdigital 5y ago
It’s called leverage. Every player in the financial system uses it; some have cut deals with the government to socialize catastrophic losses so we pretend the leverage doesn’t exist but there it is. As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. Can’t say the same for Tether.
- jcranmer 5y ago
  > As long as Coinbase allows on-demand redemptions nobody is going to care about an audit because it’s trivially easy to just convert all your USDC to real dollars almost immediately. And what happens if Coinbase were unable to convert all the USDC because the demand exceeded their stockpile of USD?
  - usrusr 5y ago
    Likely some very accidental network misconfigurion, we apologize for the inconvenience?

NelsonMinar 5y ago

Like I said, USDC is not dollars. If you're betting on Tether collapsing you sure as hell aren't going to take payment on that bet in USDC.

X6S1x6Okd1st 5y ago
They're different organizations, few people seriously think that USDC is going to 0.
- jkhdigital 5y ago
  And USDC can be converted back into actual dollars, on demand, not via a market transaction but literally a 1:1 conversion, through a variety of exchanges. You cannot say the same of Tether.
TacticalCoder 5y ago
USDC is backed by Coinbase (USDC are issued by Centre, a joint venture of Coinbase and Circle if I'm not mistaken). And Coinbase is an HN unicorn. Everybody at Coinbase is known, it's operated from the US. Coinbase ain't anywhere, not even remotely, like tether/bitfinex. There totally exists a world in which USDT goes to 0 while USDC is still worth 1 USD.
- endisneigh 5y ago
  So your logic is that big, known entities can’t go bankrupt or be scams?
  - jkhdigital 5y ago
    No, the logic is that it is less likely. Anyways, Coinbase allows on-demand conversion of USDC to USD so you really only have to hold the USDC (and Coinbase’s counterparty risk) for about a day for that process to complete. At some point that window might close but given that Coinbase is a publicly traded stock in the US and must report financials, there is quite a bit less risk compared to Tether.