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…okay, so if I deposit USDC at Coinbase, I can instantly convert the entire balance into USD, and then withdraw that USD to my bank account. The statement that
by jkhdigital 5y ago
…okay, so if I deposit USDC at Coinbase, I can instantly convert the entire balance into USD, and then withdraw that USD to my bank account. The statement that “USDC is not USD” means nothing to anyone who has access to instant and reliable conversion between the two.
- arlcode 5y agoHow much USD does Coinbase hold at any given moment? What you are missing is "counterparty" risk in the sense that Coinbases coffers are not infinite and certainly not 100% cash. In the event of a bank run they would have to say "sorry we can't pay you right now...maybe later...maybe never...nobody knows". That would effectively kill any trust in USDC and it's value plummets through the floor.
- dustintrex 5y agoAre you serious? When there's a run on something, like Tether, by definition everybody is going to be trying to dump their crypto simultaneously and cash it out for dollars. And the entire problem here is that the system does not have $69B cold hard cash floating around, meaning that the vast majority of people will be left with nothing if (when) the crash happens.
- dboreham 5y ago"instant" really doesn't exist in cryptocurrencies.