[2019-10-18] Bitcoin Has Failed But Global Stablecoins a Threat, Say BIS and G7

rodel caling

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Quote from: hatshepsut93 on October 18, 2019, 02:39:41 PM

Cool, some big governments don't take Bitcoin seriously today, and I'm happy with that, it means there's far less chances that it will get banned or regulated by them, so we can still enjoy our wild west for a while. I remember how not so long ago people here were theorizing that Libra was just a ploy to ban Bitcoin by bringing regulator's attention to cryptocurrency as a whole, but maybe it's actually the opposite - Libra distracted them from looking at Bitcoin, and some officials even praised Bitcoin when it was compared to Libra.

Well' you had point on that, libra get the attention of the government while bitcoin is free to exist and continue to circulate to the as currency being anonymous crypto currency to enjoy while the focus of the government official is in libra because they scared it as threat in the economy.

bbc.reporter

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Quote from: 1Referee on October 26, 2019, 11:40:06 AM

Quote from: bbc.reporter on October 25, 2019, 08:59:56 PM

A store of value is traditionally something that is stable. If I hold $1.00 of value in a good store of value, I expect to get the value back on $1.00 or very near it with no volatility that will give me a heart attack. Bitcoin is not similar to that, it traditionally behaves more similar to a speculative investment.

Traditionally, you said that well. Bitcoin isn't your traditional store of value. If you look at Bitcoin's long term price development, and then mainly the bottom to bottom development instead of the peak to bottom development where people always focus on, it suddenly becomes clear that it has functioned extremely well as store of value for most of the time.

Bitcoin in some areas defies the traditional meaning of the different properties of money, which people have a hard time adapting to. It by no means is a perfect store of value, or one that you should pay attention to if your time horizon is very tight, but when you have a few years to plan forward, it's more likely going to be a great store of value for you.

In the end, people want Bitcoin to be usable as daily currency therefore needs a stable price, but they also want to see the price moon therefore needs a very volatile price. It's very much contradicting.

That is a good argument. However, the way bitcoin's price and volatility is and the way how people use it today, it is still more a speculative investment than a store of value. Traditionally.

One day maybe bitcoin will find stability and be a real store of value without the moon math.

Carlton Banks

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Quote from: gentlemand on October 27, 2019, 06:05:40 AM

Maybe it's a phase that needs fully playing out out, then it becomes a store of value then it becomes a currency

It would be a total repudiation of all economic principles if a very new asset class instantly became a predictable store of value, or an instant currency (unless you're forced to do it, and even then, an instrument like that runs a huge risk of failing and being rejected by those who were the planned subjects of it). It takes time, and a virtuous circle of some use.

But let's simplify things, just get rid of absolute statements of Bitcoin is/is not a this or a that.

Bitcoin already is a bad store of value (unpredictably increases in value, but it's not losing value long-term)
Bitcoin already is a bad currency (not much use compared to others, but increasing in usage and transaction capacity, slowly)

I hope that helps

Quote from: gentlemand on October 27, 2019, 06:05:40 AM

, but I reckon it'll always be an asset primarily.

hmmm, your reasoning appears to be "I reckon"? Not sure if that classifies as useful analysis Undecided

cr1776

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The whole concept of valuing "stable" crypto as a function of fiat is just stunningly naive. Fiat is anything but stable, it continues to lose value every year, from several percentage points to thousands (or more). Not to mention it ends up creating a central point of failure, whomever is custodian of the assets backing the so-called stable coin.

gentlemand

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Welt Am Draht

Quote from: 1Referee on October 26, 2019, 11:40:06 AM

In the end, people want Bitcoin to be usable as daily currency therefore needs a stable price, but they also want to see the price moon therefore needs a very volatile price. It's very much contradicting.

To me at least the people calling for it to be a currency are a weedy voice warbling in the dark compared to the roar of those wanting mad gainz. And others who do say they want it to be a stable currency eventually will lose all interest if it ever did become that.

All the stuff big bucks is building points purely to it being treated as an asset. Maybe it's a phase that needs fully playing out out, then it becomes a store of value then it becomes a currency, but I reckon it'll always be an asset primarily.

1Referee

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Quote from: bbc.reporter on October 25, 2019, 08:59:56 PM

A store of value is traditionally something that is stable. If I hold $1.00 of value in a good store of value, I expect to get the value back on $1.00 or very near it with no volatility that will give me a heart attack. Bitcoin is not similar to that, it traditionally behaves more similar to a speculative investment.

Traditionally, you said that well. Bitcoin isn't your traditional store of value. If you look at Bitcoin's long term price development, and then mainly the bottom to bottom development instead of the peak to bottom development where people always focus on, it suddenly becomes clear that it has functioned extremely well as store of value for most of the time.

Bitcoin in some areas defies the traditional meaning of the different properties of money, which people have a hard time adapting to. It by no means is a perfect store of value, or one that you should pay attention to if your time horizon is very tight, but when you have a few years to plan forward, it's more likely going to be a great store of value for you.

In the end, people want Bitcoin to be usable as daily currency therefore needs a stable price, but they also want to see the price moon therefore needs a very volatile price. It's very much contradicting.

veleten

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yeah definitely a failure

probably the US dollar or any other fiat currency is a huge success , creating debts that cannot be paid and
drawing this world into a never ending spiral of banking theft and exploitation
certainly G7 will say stablecoins are a threat since they are afraid that there will appear some force to deny them seniorage profits eventually
stablecoins play under the same rules as the fiat money and G7 see a threat in some upstart to take over their scam scheme
bitcoin is not run by a country or a group and they do not feel that it could ever challenge the fiat supremacy
lets wait and see

Carlton Banks

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Quote from: Kyraishi on October 26, 2019, 07:23:39 AM

(still can't use it for irl/microtransactions)

Bitcoin is slightly inconvenient used in-person, so to say you "can't use it" in-person is wrong
Microtransactions are possible too, and have been for years (even though the good microtx tech is not mature yet)

Where are you getting your information from, the BIS/G7 report Grin

Quote from: Kyraishi on October 26, 2019, 07:23:39 AM

Stablecoins are likely going to replace fiat currencies

fiat currencies are backing the stablecoins Undecided

so that's completely impossible

Kyraishi

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Quote from: hatshepsut93 on October 19, 2019, 12:50:28 PM

Quote from: Kyraishi on October 19, 2019, 01:54:11 AM

What failure? They are comparing 2 completely different things. A decentralized currency that was literally made to be unstable and uncontrollable, to future speculative stablecoins that are likely going to be controlled and created by governments.

They are saying that Bitcoin failed to become a popular payment method or a store of value, and they are right, but this doesn't mean that Bitcoin is dead, it's an unpopular payment method that grows at its own pace, it's not going to disappear.

Quote from: Kyraishi on October 19, 2019, 01:54:11 AM

Central banks are going to get a lot new problems with this new wave of stablecoins. Libra was the matyr and took the blame for everything so now we can see a wave of stablecoins eventually take over. Unlucky Facebook, I really don't think Libra will be getting anywhere when these new stablecoins launch...

There's not much problems for central banks, stablecoins require permissions to operate, otherwise the underlying company will get fined and closed down. Bigger coins like Libra won't even see the day's light, smaller coins can be eventually taken down. Do you remember Liberty Reserve or egold? Stable coins are just like them.

That does make sense, not sure about the second part though. Bitcoin hasn't gotten to be fully mainstream yet and I wouldn't classify it as a popular payment method (still can't use it for irl/microtransactions), but it's definitely been seen as a storage of value, even if it is a very volatile and unstable one.

I remember egold... That was an interesting project. Stablecoins are likely going to replace fiat currencies, and bitcoin will the other cpin lurking in the background waiting to pounce, lol.

bryant.coleman

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Quote from: bbc.reporter on October 25, 2019, 08:59:56 PM

A store of value is traditionally something that is stable. If I hold $1.00 of value in a good store of value, I expect to get the value back on $1.00 or very near it with no volatility that will give me a heart attack. Bitcoin is not similar to that, it traditionally behaves more similar to a speculative investment.

I have heard about people using Bitcoin as a store of value in countries such as Zimbabwe and Venezuela. Bitcoin is volatile (for example, yesterday the prices fluctuated by +29%), but for people residing in these countries their national currencies are even more volatile when compared to Bitcoin. And using gold is not an option, as it is susceptible to seizure and robbery. However personally I would agree with you. Bitcoin is not ideal as a store of value. It can be used, only in extreme cases.

bbc.reporter

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Quote from: magneto on October 24, 2019, 04:42:54 AM

Exaggerated. Never have they said that bitcoin has failed, but rather they mentioned that bitcoin 'failed to provide' a good 'store of value'.

Which in itself is absurd. I think that they are way more focused in the short term volatility of bitcoin that disguises its long term properties as a store of value in their statements. It's obvious that BTC fluctuates drastically in the short run, but in the long run its intrinsic value should make it a safe haven asset.

Besides, are they really just going to ignore the fact that bitcoin transactions is at an all time high, and still call bitcoin not as a viable form of payment? Roll Eyes

A store of value is traditionally something that is stable. If I hold $1.00 of value in a good store of value, I expect to get the value back on $1.00 or very near it with no volatility that will give me a heart attack. Bitcoin is not similar to that, it traditionally behaves more similar to a speculative investment.

DooMAD

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Leave no FUD unchallenged

Quote from: gentlemand on October 24, 2019, 05:46:18 AM

Quote from: squatter on October 18, 2019, 02:12:02 PM

However, the October report, argues that widely adopted asset-pegged cryptocurrencies, or stablecoins, such as Libra are a growing threat to monetary policy, financial stability and competition.

This doesn't make any sense. They have full control over whether systems like that live or die. Libra has shown us that something that comprehensive and ambitious will NEVER be permitted to exist in the form proposed unless they're at the reins.

If they decided the existing stable coins needed to go then the compliant ones would be gone the same day and Tether would be hunted down and murdered shortly after.

Chances are, it's simply authored by someone without the necessary clout and this is their thinly-veiled message to the real decision makers in charge that they ensure such systems are not permitted. Give the cogs some time to turn and we'll probably see the end result being a tightening of restrictions.

Carlton Banks

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Quote from: gentlemand on October 24, 2019, 05:46:18 AM

Quote from: squatter on October 18, 2019, 02:12:02 PM

However, the October report, argues that widely adopted asset-pegged cryptocurrencies, or stablecoins, such as Libra are a growing threat to monetary policy, financial stability and competition.

This doesn't make any sense. They have full control over whether systems like that live or die. Libra has shown us that something that comprehensive and ambitious will NEVER be permitted to exist in the form proposed unless they're at the reins.

It's likely a psychological/rhetorical device: state that stable coins are threatening, leave it unsaid that unstable coins are not. Which demonstrates exactly how weak their position is, they have to exaggerate something that poses zero threat in order to implicitly attack a genuine competitor

Don't forget that it's a joint G7 statement agreed on and produced by all 7 treasury departments working together. Did no-one in all 7 notice that this conclusion makes no sense? Wink

Quote from: gentlemand on October 24, 2019, 05:46:18 AM

If they decided the existing stable coins needed to go then the compliant ones would be gone the same day and Tether would be hunted down and murdered shortly after.

Now that Tether is backed in The Caymans (instead of Hong Kong), you'd think that was possible. But there's now an offshore-yuan Tether coin, maybe that will be permitted to survive Cheesy

Who knows quite how crafty Bitfinex's Cayman Islands move was, they've had enough time to get something very cunning set up. They'll probably fold tomorrow now I've gone and said that Grin

gentlemand

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Quote from: squatter on October 18, 2019, 02:12:02 PM

However, the October report, argues that widely adopted asset-pegged cryptocurrencies, or stablecoins, such as Libra are a growing threat to monetary policy, financial stability and competition.

This doesn't make any sense. They have full control over whether systems like that live or die. Libra has shown us that something that comprehensive and ambitious will NEVER be permitted to exist in the form proposed unless they're at the reins.

If they decided the existing stable coins needed to go then the compliant ones would be gone the same day and Tether would be hunted down and murdered shortly after.

1Referee

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Quote from: magneto on October 24, 2019, 04:42:54 AM

Besides, are they really just going to ignore the fact that bitcoin transactions is at an all time high, and still call bitcoin not as a viable form of payment? Roll Eyes

The number of transactions has been steadily declining the last 6 or so months.

The decline can be attributed to Tether re-issuing its tokens on Ethereum, more services batch their transactions nowadays, Lightning use picking up, etc. I expect the number of transactions to dip further as there generally is less demand for anything related to crypto when the price is trending down for a prolonged period of time.

Most naysayers will however say that there is no one using Bitcoin for anything, which is why it's so important to educate people on what causes the number of transactions to actually decline.

magneto

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Exaggerated. Never have they said that bitcoin has failed, but rather they mentioned that bitcoin 'failed to provide' a good 'store of value'.

Which in itself is absurd. I think that they are way more focused in the short term volatility of bitcoin that disguises its long term properties as a store of value in their statements. It's obvious that BTC fluctuates drastically in the short run, but in the long run its intrinsic value should make it a safe haven asset.

Besides, are they really just going to ignore the fact that bitcoin transactions is at an all time high, and still call bitcoin not as a viable form of payment? Roll Eyes

bbc.reporter

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Quote from: Carlton Banks on October 18, 2019, 04:46:10 PM

I also am very content with Bitcoin's "failure", there must be something wrong with me Grin

Agreed! Bitcoin is a success in its own way. However, they are describing failure in a traditional sense. According to them, bitcoin has failed as a store of value because it is not stable or cannot hold value. Also according to them, it has failed as a medium of exchange because it does not scale. Both not lies.

pixie85

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They are retards who traditionally see a store of value as something that doesn't change value and bitcoin to them is a failure because it gains value. If you offer me government bonds that will remain relatively stable or bitcoin that can go up by 200% in one month I'll always take Bitcoin.

It doesn't matter that it can also lose some value in the short term. The important part is that in the long run it goes up.

Carlton Banks

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Quote from: figmentofmyass on October 19, 2019, 06:52:17 PM

crazy, right? tether and bitfinex have a real knack for poking the bear, or in this case poking the dragon. https://tether.to/tether-now-supports-offshore-chinese-yuan-cnh-launches-cnht-stablecoin/

the circulating supply is pretty small right now; only 25,000,000 CNHT have been issued. still, we've seen how quickly that can change. https://etherscan.io/token/0x6e109e9dd7fa1a58bc3eff667e8e41fc3cc07aef

[snip]

i'm still a unclear on the exact dynamics between the CNY and CNH markets. is offering a CNH stablecoin somehow less threatening to china's public stance?

that's nuts

from the way I understood it (which is clearly dated, i.e. I missed the memo that offshore CNY trades with the CNH ticker symbol Undecided

), CNH is traded exclusively in Hong Kong through banks the Chinese Central Bank can control. This arrangement allows controlled movement of capital in/out, and provides an FX fig leaf to allow the Chinese gov to claim that CNY is available on markets to foreigners, but that CNH trading is still puppeteered by Beijing to prevent divergence from the official CNY rates (which are essentially entirely notional, CNY trades only 1:1 against CNH).

By allowing CNH to be used to back a stablecoin... it seems like that would risk the marketplace finding a real price for CNH against other currencies, exposing the 1:1 peg between on/off shore yuan. So if they want to continue to control capital flight and ultimately the yuan's value, relinquishing control of the CNH market is the wrong way to do that.

But the details are important of course, such a small CNHT supply makes for an illiquid market that cannot have a significant effect on CNH overall. Still, it's loosening the policy, and that leads in only one direction IMO.

senin

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I'm still interested in the possible consequences of the G7 report and the Bank for International Settlements. Does this mean that the legalization of decentralized cryptocurrencies will now drag on? If this happens, the process of regulating the activities of the ICO will also be delayed. I’m just waiting for a definition of the general approach of states to registration and possible licensing of ICOs, which will dramatically reduce the level of fraud among ICO projects.
It is also interesting that this report almost did not affect the price of bitcoin. Its price has only slightly fallen and this is even possibly not related to such news.

Topic: [2019-10-18] Bitcoin Has Failed But Global Stablecoins a Threat, Say BIS and G7 (Read 437 times)