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> a shared ledger implemented with traditional databases / protocols would be faster, easier, and more transparent. Stablecoin is not a technology. It's an exc
by raincole 1y ago
> a shared ledger implemented with traditional databases / protocols would be faster, easier, and more transparent.
Stablecoin is not a technology. It's an excuse. An excuse to do what banks do while not being regulated like a bank or using the infrastructure banks use. Similar to how Airbnb is not a technology but an excuse to do what hotels do without hotel's license.
So it makes no sense to compare it to database, a technology.
Will this excuse work? Banking is a heavily regulated field so it's less likely than Airbnb, but it's ultimately up to lawmakers.
- deleted 1y ago[deleted]
- janfromaztec 1y agoStablecoin issuers require much less regulations because their activity is auditable onchain. If they start misbehaving they get regulated by the free market - people will stop using the given stablecoin and move to a competition.
- angry_albatross 1y agoYou think that the free market has regulated or audited Tether? I don't think so, that company is about as sketchy as it is possible to be, and yet it continues to dominate the stablecoin market.
- madamelic 1y agoPersonally, I think US banking needs something an Uber or AirBnB style shake-up to get their act in order. It's awful how behind the times the US is when it comes to banking. 2 - 3 days to get money from one account to another is beyond embarrassing in the modern day. It took the US something like 15 years to get chip-and-pin. Banks are still these monolithic entities that don't care to innovate or listen to customers because "what are you going to do, go to one of the other 4 monoliths that are all in cahoots with each other"
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- 9dev 1y agoOther countries managed to regulate their banks to innovate just fine without blockchain technology, though. It doesn’t always need a startup to disrupt something by flipping the finger to lawmakers. Sometimes humble regulation is enough. Take SEPA as an example: I can transfer money free of charge to any European bank account, in a few seconds.
- input_sh 1y agoTo be fair, European Central Bank also wants to introduce its own official Euro-backed "stablecoin" (https://en.wikipedia.org/wiki/Digital_euro https://en.wikipedia.org/wiki/Digital_euro), mostly because they are scared of the posibility that Dollar-backed stablecoins could make Euros less relevant in the future (https://www.politico.eu/article/lagardes-euro-moment-busted-by-stablecoins/ https://www.politico.eu/article/lagardes-euro-moment-busted-...).
- latchkey 1y agoSmall money is fine. Any big transaction will get flagged and potentially delayed. I don't know about you, but I'd rather use a system that allows me to do what I want with my funds without anyone else controlling it.
- degamad 1y ago> I don't know about you, but I'd rather use a system that allows me to do what I want with my funds without anyone else controlling it. How do we know that this unusual transaction is you doing what you want and not someone else controlling and defrauding you? A small well-understood amount of friction that significantly reduces everyone's risk is not an attempt to control your funds. Old systems with arbitrary delays based on twentieth century processes should be replaced, but not everything needs immediate infinite speed to be valuable.
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- all2 1y agoGovernment granted licenses are the root of many, many ills.
- Bjartr 1y agoThey're also the solution to many. Like any tool, they can be used well or used poorly. It's not really sufficient to call out that they can be problematic, it needs to be down that they are problematic in this case and that an unregulated system wouldn't simply trade present downsides with larger ones that the regular holds at bay.
- kccqzy 1y agoLarge banks like JPMorgan Chase are also looking into launching their own stablecoins, just because it has less regulation than normal banking. In fact Jamie Dimon himself says so. The idea is really simple: creating stablecoin deposit accounts for customers allows banks to skip existing customer protections that are normally afforded to traditional deposit accounts.
- dangero 1y agoYes — similarly I work in cryptocurrency and constantly try to tell people that credit cards are unbeatable for payments because of the consumer protections. Chargebacks are an insanely consumer friendly feature. Nobody ever wants to engage in that conversation.
- topranks 1y agoYep. And the White House will let them now.
- gamblor956 1y agoStablecoins will end subject to just as much regulation as a normal bank, maybe even more. JPMorgan Chase, BofA, and their ilk have R&D budgets large enough to have already launched a dozen stablecoins by now. They haven't, not because they can't (on a technical level) but because they don't actually see the value to it (on a business level). They're simply paying lip service to crypto because it pumps up share value, the same way every business was bragging about their AI investments just a few months ago.
- Ericson2314 1y agoI certainly hope you are right! It depends on how deep the trump admin 2 rot will go.
- immibis 1y agoIs Uber subject to taxi regulations yet?
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- allknowingfrog 1y agoDo we have a term for this phenomenon yet? Airbnb is a great example. Uber is another. Regulatory loopholes are the way that these companies actually make money, but they call it "technology" and everyone kind of shrugs.
- cvs268 1y agoOne term for it is "Regulatory Arbitrage".
- consumer451 1y agoThis has been my favorite SV euphemism for years.
- taberiand 1y ago[flagged]
- forgotTheLast 1y agoThat term has a very specific meaning and I wish people stopped using it to mean "big tech doing something bad"
- wazdra 1y agoWell, doesn't that specific meaning apply here? I mean, the lack of protection for end-users is at first compensated by investment money (low prices and huge effort on support). Once network effect is reached, the unregulated nature of the platform shows, end-users are wronged, only providers profit from the lack of regulation ... Or maybe I don't understand the meaning of enshittification?
- stevage 1y agoIt means something very different from your definition.
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- narrator 1y agoCan you do fractional reserve banking with stablecoins where you lend out the underlying dollars to people and don't have full reserves? That's what makes banking tricky. When there are a surge of loan defaults across the banking system the money supply shrinks rapidly unless the government bails them out. Thus, the need for regulation. One reason the U.S government has to like stablecoins is because Tether is one of the biggest buyers of U.S treasuries that they use to back their stablecoins.
- topranks 1y agoOnly a fool would think Tether have never had an audit done out of fear it would prove they’re fully backed.
- graeme 1y agoYes, you can absolutely do that with stablecoins. Why couldn't you?
- sagarm 1y agoThen bank runs or regulation seem inevitable.
- elteto 1y agoHow would the “out of thin air” value creation work in a blockchain ledger? Pardon my very naive understanding of both subjects.
- topranks 1y agoThe same way it does in Excel. You fire up Excel. Put some numbers in the boxes. Say those numbers are dollar bills you have under the bed. Then you do SUM(A1:A10) to show your total funds. It has to be legit because Excel doesn’t lie right?
- Onavo 1y agoThe reward function in the smart contract can be made to increase over time.
- woah 1y ago> An excuse to do what banks do while not being regulated like a bank or using the infrastructure banks use. Stablecoins are much more heavily regulated than banks, being required to have 100% reserves under the GENIUS act, unlike banks who generally only ever hold on to 10% of the money you deposit with them. Using their infrastructure? Why?
- jekrb 1y agothe excuse is actually the other way around i think banks are an excuse to have closed source ledgers that don't operate efficiently for internet capital markets if they wanted to, they could open source their ledgers and let anyone make them faster, more interoperable, more programmable, etc. stablecoins operate on infra that is more like linux for finance, anyone can contribute to blockchain rails and even run their own nodes
- grafmax 1y agoThe issue with stablecoins is not just regulatory. They are fragile to market shocks.
- drumdance 1y agoHow so? Stable coins issued under the GENIUS Act are fully reserved, unlike regular banks.
- grafmax 1y agoThey’re backed by treasuries and subject to treasury market shocks (like the March 2020’s dash for cash). Large redemptions can see a feedback loop of redemption -> rushed selling -> treasury market stress -> redemption. Exactly the sort of scenario one might expect as the secular trend of the weakening dollar bubbles to the market’s surface. Stablecoins hold a sizable portion of the treasury market - https://fintelegram.com/stablecoins-became-a-top-20-us-debt-holder-is-treasury-risk-now-tokenized/ https://fintelegram.com/stablecoins-became-a-top-20-us-debt-...