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Except the assets that maintain the stability of their stablecoin are stored off-chain and we will have to trust someone’s word that they exist in sufficient qu

Except the assets that maintain the stability of their stablecoin are stored off-chain and we will have to trust someone’s word that they exist in sufficient quantities.

hsjqllzlfkf 3y ago
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brokenkebaby 3y ago
Trust in a bank's stablecoin obviously tied to trust in that bank's stability in general. So this particular problem is reduceable to the one we've been having all the time banks exist.
baby 3y ago
I have a feeling checking that a bank indeed stores the amount or X coins that they’ve minted on the network should be an easy audit. Although non-crypto digital money nowadays is a mess so I’m not even sure if that’s possible.
- lxgr 3y ago
  There is no need to audit the liabilities (i.e. the stablecoin issued), what matters are the assets/reserves. And since these by nature are not on-chain for a fiat currency backed stablecoin, this is not trivial at all: Not only do you need to plausibly demonstrate the existence of assets, but also that they are not otherwise encumbered.
  - baby 3y ago
    That’s what I meant, how do audit reserves when it’s most likely a digit in the bank account database? You’d have to audit their accounts at all banks including central banks. If only banks used crypto :))
WastingMyTime89 3y ago
In this case, you have trust one of the largest bank of France and the French authority auditing it (these are regulated assets when it comes to backing). That feels to me a bit safer than some random company in a tax-haven. It comes a bit late sadly.
hinata08 3y ago
Don't worry about them. They were involved in the Libor things They were involved in lybian government funds scandals They had 2.6B of settlement in the USA for these cases. They were involved in Panama papers They once lost pocket money in risky investments (4.82 billion EUR) before the subprimes hit them (2.1B) (see the Kerviel case) So I wouldn't trust them if they said they were the most socially responsible company out there. But I trust them more than meme makers at FTX to back a stablecoin.

Except the assets that maintain the stability of their stablecoin are stored off-chain and we will have to trust someone’s word that they exist in sufficient quantities.

hsjqllzlfkf 3y ago

[dead]

brokenkebaby 3y ago

Trust in a bank's stablecoin obviously tied to trust in that bank's stability in general. So this particular problem is reduceable to the one we've been having all the time banks exist.

baby 3y ago

I have a feeling checking that a bank indeed stores the amount or X coins that they’ve minted on the network should be an easy audit. Although non-crypto digital money nowadays is a mess so I’m not even sure if that’s possible.

lxgr 3y ago
There is no need to audit the liabilities (i.e. the stablecoin issued), what matters are the assets/reserves. And since these by nature are not on-chain for a fiat currency backed stablecoin, this is not trivial at all: Not only do you need to plausibly demonstrate the existence of assets, but also that they are not otherwise encumbered.
- baby 3y ago
  That’s what I meant, how do audit reserves when it’s most likely a digit in the bank account database? You’d have to audit their accounts at all banks including central banks. If only banks used crypto :))

WastingMyTime89 3y ago

In this case, you have trust one of the largest bank of France and the French authority auditing it (these are regulated assets when it comes to backing). That feels to me a bit safer than some random company in a tax-haven. It comes a bit late sadly.

hinata08 3y ago

Don't worry about them. They were involved in the Libor things They were involved in lybian government funds scandals They had 2.6B of settlement in the USA for these cases. They were involved in Panama papers They once lost pocket money in risky investments (4.82 billion EUR) before the subprimes hit them (2.1B) (see the Kerviel case) So I wouldn't trust them if they said they were the most socially responsible company out there. But I trust them more than meme makers at FTX to back a stablecoin.