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Going to Circle to redeem your USDC for FIAT USD is not the only way of receiving FIAT USD from USDC. You can also sell it for another asset, and sell that for

by Jommi 4y ago

Going to Circle to redeem your USDC for FIAT USD is not the only way of receiving FIAT USD from USDC. You can also sell it for another asset, and sell that for FIAT. Or sell it for FIAT on an exchange. The OP was about the safety of "holding" fiat on a single exchange vs USDC on your wallet. Your point about non-custodial wallet risk is a misonemer as this is purely about can you trust yourself more than trust an exchange.

lottin 4y ago
I don't think you understand how a currency peg works. If USDC loses the peg, arbitrageurs will buy USDC and redeem them, pocketing the difference. This will create a buying pressure that will re-establish the peg. Therefore maintaining the peg depends crucially on the issuer's ability to redeem USDC. If the issuer fails to redeem USDC, it's game over. The point that I made about the risks associated with using non-custodial wallets is also very valid.
- Jommi 4y ago
  I don't think you understand how USDC's redempetion works. It's not a website accessible by anyone open for redemptions 24/7. Read on that first before discussing this topic please.
  - lottin 4y ago
    And this matters why? Being an economist, I think I know how a currency peg works, but if you think I'm wrong feel free to explain it to me.
    - Jommi 4y ago
      : D Being an economist does not mean you automatically know how Circle (a payments company based in the US) issues the ERC-20 token that is called "USDC", or how the redemptions for that work. You can read about it here: https://www.circle.com/en/usdc https://www.circle.com/en/usdc and here https://www.centre.io/usdc https://www.centre.io/usdc You can see centralized and decentralized exchanges with USDC liquidity here: https://www.coingecko.com/en/coins/usd-coin#markets https://www.coingecko.com/en/coins/usd-coin#markets
      - lottin 4y ago
        This is like suggesting that a mechanic should read some car's owner's manual in order to learn how internal combustion engines work. Look, don't try derail the conversation. Your claim is that in the event that the issuer of USDC would fail to redeem the tokens, you could still redeem them elsewhere. Explain how that would work.
        Jommi 4y ago
        Okay I think I see what you're saying better now - you're talking about the long term if such thing happens while I was purely thinking "in the moment". Sorry for the tone, internet discussion can sometimes spin off quite fast just because its a pseudonymous environment. Have a great day!

by Jommi 4y ago

lottin 4y ago

I don't think you understand how a currency peg works. If USDC loses the peg, arbitrageurs will buy USDC and redeem them, pocketing the difference. This will create a buying pressure that will re-establish the peg. Therefore maintaining the peg depends crucially on the issuer's ability to redeem USDC. If the issuer fails to redeem USDC, it's game over. The point that I made about the risks associated with using non-custodial wallets is also very valid.

Jommi 4y ago
I don't think you understand how USDC's redempetion works. It's not a website accessible by anyone open for redemptions 24/7. Read on that first before discussing this topic please.
- lottin 4y ago
  And this matters why? Being an economist, I think I know how a currency peg works, but if you think I'm wrong feel free to explain it to me.
  - Jommi 4y ago
    : D Being an economist does not mean you automatically know how Circle (a payments company based in the US) issues the ERC-20 token that is called "USDC", or how the redemptions for that work. You can read about it here: https://www.circle.com/en/usdc https://www.circle.com/en/usdc and here https://www.centre.io/usdc https://www.centre.io/usdc You can see centralized and decentralized exchanges with USDC liquidity here: https://www.coingecko.com/en/coins/usd-coin#markets https://www.coingecko.com/en/coins/usd-coin#markets
    - lottin 4y ago
      This is like suggesting that a mechanic should read some car's owner's manual in order to learn how internal combustion engines work. Look, don't try derail the conversation. Your claim is that in the event that the issuer of USDC would fail to redeem the tokens, you could still redeem them elsewhere. Explain how that would work.
      - Jommi 4y ago
        Okay I think I see what you're saying better now - you're talking about the long term if such thing happens while I was purely thinking "in the moment". Sorry for the tone, internet discussion can sometimes spin off quite fast just because its a pseudonymous environment. Have a great day!