That really depends on how demanding you are. For example, I prefer to thoroughly wipe the dishes after taking them out of the dishwasher (if necessary). This is a fairly demanding task in terms of motor skills. I suppose we all have similar discrepancies from what is considered normal or good enough.
I mean, I sorta do need that. If a dishwasher-emptying robot drops my favourite tea mug while doing it, that will be quite a significant negative against it.
I like USDe, but it's not completely decentralized. You still have to trust whoever's trading the basis like you have to trust Tether/Circle to trade treasuries.
I think the most disruptive thing about stablecoins is the ability to opt-into your monetary system of choice.
It's hard for the average non-US person to opt-into the US financial system. Sure, they could hold dollars in banks, but local monetary policy can nix that privilege at anytime by imposing foreign exchange controls. It's happened before, in some of the largest economies in the world: China in 2015, India in 2013, Argentina in 2011.
The current way users solve this problem requires a lot of resources. That's why you usually only see rich people have Cayman accounts, Canadian real estate, and shell companies in Panama. Stablecoins on permissionless blockchains make this process 100x more accessible for the average person.
So yes, stablecoins currently let you circumvent regulation.
But regulation can be a prison where you can pay to be free.
So what happens when it costs nothing to get out of jail? What kind of strains do this place on economies that people escape, as well as the economies that people join?
This is as wrong as everytime someone says "the benefit of Bitcoin is you can just walk all your assets across the border!"
It fundamentally misunderstands how foreign exchange works, or how government backed currency works.
You cannot "opt out" of the local currency: period. It is the only currency which can extinguish tax obligations. And even if it wasn't government backed, you can't trade in a currency no one wants in the first place.
This should be trivially obvious from the observation that how much water a gold bar in the desert buys you is going to be pretty highly variable.
Just because badly managed local currency is required for taxes doesn't mean that most people in that country _must want_ to hold it. Plenty of trivially obvious evidence to the contrary
I assume you've never experienced hyper-inflation? If you have, do you think it's fair that you were forced into a hyper-inflationary currency? And, if given the means to, do you think it's fair that people _should_ have the ability to choose?
That's not the point: the point is "how do you buy the coin in the first place?"
If you live in a place then you have to trade in whatever the local currency is. You didn't "opt in" to a particular stable coin: someone has to be willing to accept that specific coin as payment.
And they can't just exchange it to another: the exchange has to want to sell that coin in exchange for the coin you transact with.
And to interact locally with the government, you need someone who is willing to sell coins in exchange for the currency you don't want.
In practical alternate market economies, the only currency which trades tends to be USD and the exchange rate will be bad because it's a grey market. I would go further and posit that where crypto has any impact, it's people because it's a window into being able to hold USD.
Certainly the only question anyone asks about Tether is whether they actually have the USD to cover their position: no one wants a Yuan based see stable coin.
I think it's pretty easy to buy the coins, regardless of government intervention. Countries (ie China, Nigeria) have tried and failed to restrict access to cryptocurrencies. Whether you get good execution is a separate issue- my point is that stablecoins enable you to execute these trades in the first place.
Agree with the posit- stablecoins grew a lot during periods of strict monetary policy (ie capital outflow from China starting in 2015, hyperinflation in 2023).
Note my original post said disruptive, not good. Meant it in the truest sense of the word; both good and bad comes out of it.
you’ll note that many countries that impose capital controls have large informal economies. this is not a question of theory, there are many countries where millions of people do hold significant sums in dollars and other foreign currencies, regardless of whether they fulfill tax obligation. enough people do this and you also get the informal economy transacting in these currencies. you are “proving” the non-existence of something that in actuality is practiced by millions of people every single day.
And now western countries can also have ultra corrupt, opaque and controlled by a small oligarchy group currency system, just like some 3rd world countries. Yay, progress :)
Thought experiment: how much USDT is made unredeemable every year? including through lost private keys, freezing related to sanctions, etc
If you think 1% is a reasonable number, that’s 1BN per year at current market cap. Tethers been around for 10 years. Dead funds also compound.
Let’s say Tether was grossly insolvent (ie only had 50% of reserves) for the first 10BN in market cap (in other words, for the first 5 years of their existence). In addition to the 6BN+ of interest income they earn every year, there’s 1BN of reserves that will never get redeemed added every year
If Tether was insolvent before, they just need time to change that
I’m doubtful these numbers are realistic, but a more conventional explanation is that stablecoins can earn interest on conservative investments (like treasuries) but don’t pay interest, which should be profitable enough if they don’t get too greedy.
This is very roughly similar to banking. It’s an unregulated bank, but it’s not inevitable that they’ll implode.
adding onto this, i as a citizen of <high inflation country> who buys dollars from the national bank are probably holding digital dollar receipt anyways, since most foreign dollar holdings are held in nostro accounts at US correspondent banks.
if you trust your banking system to be a better custodian of your money than Circle, you're one of the lucky ones. billions of people in the world don't have that kind of luxury (see: https://www.bbc.com/news/world-asia-68778636), hence a part of the reason why stablecoins have grown to a little under a quarter trillion
I'm no SBF fan by any means, and I think his actions were wrong.
That being said, not knowing anything at the start about the industry you build a company in yields 0 signal about someone's competence. How much did Brian Chesky know about hospitality or marketplaces before starting Airbnb? The Lyft founders about taxis? Zuck or Page/Brin about ads?
If you dig in his testimony the last two days, his answer when he meanders his way there is he didn’t know for almost everything that went wrong and that he trusted other people like his legal counsel and other employees. He is trying a variation on the Ollie North “I do not recall.” defense but he can’t help himself and keeps on running his mouth - the judge stopped him multiple times during his speechifying and made him just answer questions from his own lawyer.
