I've asked people questions about stablecoins before on other fora, and I get the impression that even if they maintain their peg, they wouldn't be useful to mere mortals as opposed to big crypto exchanges. Just so that others and myself can be absolutely clear, what are USD-pegged stablecoins for? No snarky answers, please.
I ask this because:
- you can't actually shop in your supermarket using stablecoins
- there is more risk to them than holding USD
- there is no increase in privacy because blockchains are public ledgers
- it's not bankless because the stablecoin issuer is effectively a (poor) bank
- it doesn't bypass KYC or AML because a regulator can decide that stablecoins are effectively currency. Also, Bitfinex requires their KYC forms to be filled out before you can withdraw stablecoins, making them no better than fiat, at least within the context of that exchange. If other crypto exchanges are like this, then you are better off converting to fiat every single time.
From discussions with people, this appears to be a weird dance that means regulators can't regulate, for some reason.
I ask this because:
- you can't actually shop in your supermarket using stablecoins
- there is more risk to them than holding USD
- there is no increase in privacy because blockchains are public ledgers
- it's not bankless because the stablecoin issuer is effectively a (poor) bank
- it doesn't bypass KYC or AML because a regulator can decide that stablecoins are effectively currency. Also, Bitfinex requires their KYC forms to be filled out before you can withdraw stablecoins, making them no better than fiat, at least within the context of that exchange. If other crypto exchanges are like this, then you are better off converting to fiat every single time.
From discussions with people, this appears to be a weird dance that means regulators can't regulate, for some reason.