Could stable coins save a deprecating economy

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Quote from: Blitzboy on November 14, 2023, 03:52:16 AM

The ease of sending 'digital cash' abroad without a bank is revolutionary. Isnt it like having a worldwide money at hand? That happens when inflation wobbles the USD? Suddenly, these stablecoins become unstable .

Imagine stablecoins pegged to a basket of currencies or commodities, reducing reliance on any single currency's stability. AI-driven stablecoins could modify pegs based on real-time economic variables. Think this may make the digital economy more resilient?

Your idea about stablecoins becoming CBDCs is intriguing. Is this the future of money? We're on the verge of a financial revolution as decentralised digital currencies change how we think about and use money. Huge potential, but also huge obstacles. Its a balancing act between innovation, regulation, and the ever-elusive trust of the public
"

I believe governments will side with private companies to adopt stablecoins as their own. Why re-invent the wheel by launching a new digital currency from scratch? Using an already-established digital currency pegged to the value of Fiat, is the best solution. If governments take this approach, they will force private companies (Tether, Circle, Paxos, etc) to work for them. They will take over the world by storm whenever you like it or not.

Truly-decentralized cryptocurrencies (particularly Bitcoin) will survive, but they won't be used as massively as their centralized counterparts. The global economy will "reset", but with government-backed digital currencies as its "backbone". Who knows how far we are before this becomes a reality? Cheesy

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No, I think that is not a very simple idea to just say stable coins will save a depreciating economy because a lot of factors are in play. When there is an economic depreciation, it doesn't have to mean that it is all just have to be about coins. Even war, natural disasters, pandemic and many other things can also lead to the instability of an economy which will then affect most probably the value of an asset a country may have. Perhaps in the smallest sense it may, but not totally or generally.

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Quote from: Abiky on November 13, 2023, 09:38:22 AM

Quote from: Sophokles on November 11, 2023, 12:52:27 PM

All stablecoins are not pegged to USD. We have stablecoins pegged to EUR, INR etc but USD is the most common in the space and widely acceptable. Using stablecoin is much easier for people outside of the USA and Europe. If you live outside of Europe you can still keep your money in EURO currencies by using the EURO pegged stablecoin. This becomes convenient for many people but there is some risk associated with it. Most of this stablecoin is related to lending platform and these platforms are one of the primary targets of hackers and exploiters. So if these lending platforms got affected their stablecoin would as well.

USD is the world's reserve currency, so it's normal to see USD-pegged stablecoins being the driven forces of the crypto market. Stablecoins linked to other Fiat currencies are not as popular as the USD ones. In countries where it's hard to get access to the USD directly, stablecoins makes wonders. You can virtually send/receive USD anywhere in the world without a bank account. How cool is that? This versatility allows countries to save a ""depreciating economy"".

Of course, that is subject to the USD's inflation rates. If inflation soars like crazy, the USD will lose value big time. What sense would it make to use a USD-pegged stablecoin by then? I'm glad there are plenty of options for everyone. Maybe these stablecoins will become the new CBDCs in the future? Cheesy

The ease of sending 'digital cash' abroad without a bank is revolutionary. Isnt it like having a worldwide money at hand? That happens when inflation wobbles the USD? Suddenly, these stablecoins become unstable .

Imagine stablecoins pegged to a basket of currencies or commodities, reducing reliance on any single currency's stability. AI-driven stablecoins could modify pegs based on real-time economic variables. Think this may make the digital economy more resilient?

Your idea about stablecoins becoming CBDCs is intriguing. Is this the future of money? We're on the verge of a financial revolution as decentralised digital currencies change how we think about and use money. Huge potential, but also huge obstacles. Its a balancing act between innovation, regulation, and the ever-elusive trust of the public
"

Abiky

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Quote from: Sophokles on November 11, 2023, 12:52:27 PM

All stablecoins are not pegged to USD. We have stablecoins pegged to EUR, INR etc but USD is the most common in the space and widely acceptable. Using stablecoin is much easier for people outside of the USA and Europe. If you live outside of Europe you can still keep your money in EURO currencies by using the EURO pegged stablecoin. This becomes convenient for many people but there is some risk associated with it. Most of this stablecoin is related to lending platform and these platforms are one of the primary targets of hackers and exploiters. So if these lending platforms got affected their stablecoin would as well.

USD is the world's reserve currency, so it's normal to see USD-pegged stablecoins being the driven forces of the crypto market. Stablecoins linked to other Fiat currencies are not as popular as the USD ones. In countries where it's hard to get access to the USD directly, stablecoins makes wonders. You can virtually send/receive USD anywhere in the world without a bank account. How cool is that? This versatility allows countries to save a "depreciating economy".

Of course, that is subject to the USD's inflation rates. If inflation soars like crazy, the USD will lose value big time. What sense would it make to use a USD-pegged stablecoin by then? I'm glad there are plenty of options for everyone. Maybe these stablecoins will become the new CBDCs in the future? Cheesy

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Quote from: Thehallows on August 17, 2023, 07:01:44 AM

Introducing stablecoins as a major currency in countries experiencing economic instability is an interesting idea that has both potential benefits and challenges. I don't really know if this would be a good idea but I think this could help many countries that are facing a real currency depreciation.
This are some of the benefits I think I could bring

Stability: Stablecoins are designed to be less volatile than traditional cryptocurrencies like Bitcoin or Ethereum. This stability could provide a more reliable medium of exchange and store of value, especially in economies with rapidly depreciating currencies.

Inflation Control: Stablecoins are typically pegged to a stable asset like a fiat currency or commodity, which could help countries better control inflation and manage their monetary policy especially in African countries.

Financial Inclusion: Stablecoins could increase financial inclusion by providing access to digital financial services for individuals who are unbanked or underbanked.

Reduced Transaction Costs: Digital transactions using stablecoins can potentially be more efficient and cost-effective compared to traditional payment systems, especially for cross-border transactions.

Please share your insights on this topic.

Economic depreciation has nothing to do with currency at all, because economic depreciation means the wear and tear of an asset beyond its expected capacity or utility. So it's related to the assets of an economy, not the currency. And the causes of the depreciation are wear and tear on an asset, perishability, economic advancement, expiration of dates, etc.Even if you meant depreciation of currency, stable coins are not changing their value; they carry the same value as the fiat currency. Then how can you expect stable coins to save you from the depreciation of currency?So the depreciation of currency and the economy is a natural economic phenomenon, but when it crosses the line, the government and other parties are taking care of it.

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Quote from: Bushdark on November 11, 2023, 03:33:29 PM

Quote from: Sophokles on November 11, 2023, 12:52:27 PM

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Quote from: Bureau on November 09, 2023, 07:47:18 AM

Quote from: Abiky on November 09, 2023, 07:30:51 AM

How would stablecoins save a depreciating economy? Aren't them tied directly to the value of national (Fiat) currencies? I appreciate the UK's efforts in embracing the revolution with open arms. But simply adopting stablecoins is not enough to save their economy. Putting inflation under control is what will eventually solve the problem. The thing is, our world is going from one crisis to another. With the COVID-19 pandemic still at large, rising geopolitical tensions, and wars, we can never expect the mainstream economy to recover.

All stablecoins are pegged to USD and if done correctly then it can boost the economy. In countries like Lebanon and others where there is too much fluctuation in local currency, using stablecoin would help them. In countries where the local currency is stable using stable coins would only destroy their economy. Then there is a big question as to why use a stablecoin as it will indirectly give economic control to the USD or the US government. What the UK government is doing just replicating their pound to a stablecoin and creating their form of CBDC I think.

All stablecoins are not pegged to USD. We have stablecoins pegged to EUR, INR etc but USD is the most common in the space and widely acceptable. Using stablecoin is much easier for people outside of the USA and Europe. If you live outside of Europe you can still keep your money in EURO currencies by using the EURO pegged stablecoin. This becomes convenient for many people but there is some risk associated with it. Most of this stablecoin is related to lending platform and these platforms are one of the primary targets of hackers and exploiters. So if these lending platforms got affected their stablecoin would as well.

Stable coins are mostly owned by private individuals or group of people like team. I don't think the government have the time to create a stable coin when they can easily develop there local fiat and create a digital version just like the way we have Chinese Yuan. This kind of coin enables citizens and other people that are ready to trade with such a coin. The government can only regulate stable coins but don't have a full right to own there own stable coin. Stable are mostly use by people to create a differences between volatile coins and escape bear market.

I don't think in countries like Lebanon the government is promoting crypto based stablecoins. It is their citizens who are using it due to the hyperinflation these countries economies are going through. They need to use an alternative of their fiat currencies to get away from the inflation and crypto based major stable coins like USDT and USDC are some of the most convenient for them to use. They can easily use them like they use a credit card and it is not hard to integrate them with their local businesses. The government can not directly use them as there will be regulatory issues.

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Quote from: Sophokles on November 11, 2023, 12:52:27 PM

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Quote from: Bureau on November 09, 2023, 07:47:18 AM

Quote from: Abiky on November 09, 2023, 07:30:51 AM

How would stablecoins save a depreciating economy? Aren't them tied directly to the value of national (Fiat) currencies? I appreciate the UK's efforts in embracing the revolution with open arms. But simply adopting stablecoins is not enough to save their economy. Putting inflation under control is what will eventually solve the problem. The thing is, our world is going from one crisis to another. With the COVID-19 pandemic still at large, rising geopolitical tensions, and wars, we can never expect the mainstream economy to recover.

All stablecoins are pegged to USD and if done correctly then it can boost the economy. In countries like Lebanon and others where there is too much fluctuation in local currency, using stablecoin would help them. In countries where the local currency is stable using stable coins would only destroy their economy. Then there is a big question as to why use a stablecoin as it will indirectly give economic control to the USD or the US government. What the UK government is doing just replicating their pound to a stablecoin and creating their form of CBDC I think.

All stablecoins are not pegged to USD. We have stablecoins pegged to EUR, INR etc but USD is the most common in the space and widely acceptable. Using stablecoin is much easier for people outside of the USA and Europe. If you live outside of Europe you can still keep your money in EURO currencies by using the EURO pegged stablecoin. This becomes convenient for many people but there is some risk associated with it. Most of this stablecoin is related to lending platform and these platforms are one of the primary targets of hackers and exploiters. So if these lending platforms got affected their stablecoin would as well.

Stable coins are mostly owned by private individuals or group of people like team. I don't think the government have the time to create a stable coin when they can easily develop there local fiat and create a digital version just like the way we have Chinese Yuan. This kind of coin enables citizens and other people that are ready to trade with such a coin. The government can only regulate stable coins but don't have a full right to own there own stable coin. Stable are mostly use by people to create a differences between volatile coins and escape bear market.

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Quote from: Bureau on November 09, 2023, 07:47:18 AM

Quote from: Abiky on November 09, 2023, 07:30:51 AM

How would stablecoins save a depreciating economy? Aren't them tied directly to the value of national (Fiat) currencies? I appreciate the UK's efforts in embracing the revolution with open arms. But simply adopting stablecoins is not enough to save their economy. Putting inflation under control is what will eventually solve the problem. The thing is, our world is going from one crisis to another. With the COVID-19 pandemic still at large, rising geopolitical tensions, and wars, we can never expect the mainstream economy to recover.

All stablecoins are pegged to USD and if done correctly then it can boost the economy. In countries like Lebanon and others where there is too much fluctuation in local currency, using stablecoin would help them. In countries where the local currency is stable using stable coins would only destroy their economy. Then there is a big question as to why use a stablecoin as it will indirectly give economic control to the USD or the US government. What the UK government is doing just replicating their pound to a stablecoin and creating their form of CBDC I think.

All stablecoins are not pegged to USD. We have stablecoins pegged to EUR, INR etc but USD is the most common in the space and widely acceptable. Using stablecoin is much easier for people outside of the USA and Europe. If you live outside of Europe you can still keep your money in EURO currencies by using the EURO pegged stablecoin. This becomes convenient for many people but there is some risk associated with it. Most of this stablecoin is related to lending platform and these platforms are one of the primary targets of hackers and exploiters. So if these lending platforms got affected their stablecoin would as well.

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Quote from: mich on November 08, 2023, 02:13:34 AM

Well maybe they can and this is why Bank of England has now released a stablecoin regulation plan. They want to bring stablecoins in its real economy.
Executive director of Consumers and Competition at the Financial Conduct Authority Sheldon Mills had good things to say for stabelcoins. 'Stablecoins have the potential to make payments faster and cheaper for all, and that’s why we want to offer firms the ability to utilise this innovation safely and securely'.
https://www.bankofengland.co.uk/paper/2023/dp/regulatory-regime-for-systemic-payment-systems-using-stablecoins-and-related-service-providers

These stablecoins could have provided alternatives to governments and various financial institutions. At least to avoid the crypto wave, which they fear because it will destroy their industry in the monopoly of providing financial services. But their dreams did not last long because those stablecoins proved to be not actually stable, and the name was derived only from their connection to the dollar without taking into account other peculiarities that make stablecoins one of the most dangerous assets that can be used.

Fragile economies need comprehensive rehabilitation that relieves them of the trouble of being tied to foreign currencies such as the dominance of the dollar, and at the same time they cannot venture to adopt Bitcoin or any of the cryptocurrencies due to price instability and weak liquidity. Today, most economists are studying the possibility of benefiting from centralized currencies on the blockchain in the so-called CBDC, which is expected to provide better results.

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Quote from: oktana on November 09, 2023, 07:47:29 PM

I do not see how this works. Stable coins like USDT, USDC, etc are pegged to US dollar. Being pegged to dollar means that it will always maintain the same value as the US dollar. With that said, the difference it has from the actual US dollar is that it is a cryptocurrency that was made to escape volatility of most cryptocurrencies (like Bitcoin, etc). How then does this help a deprecating economy? I mean… it’s just the US dollar anyway. Is there something I missed or can someone make this make more sense?

Same with on this confusion mate, I think the major reason for fiat depreciation over is the increased printing of fiat money which has brought a sense of devaluing of the money which stable coins are not inline with this logic. Stable coins like USDT are way different than the normal fiat currency because the supply is actually less than the demand giving it value and for fiat it's opposite where the supply is more.

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How is that gonna work? Stable coins is pegged to a FIAT and depreciating economy would affect the FIAT itself so it's not really solve any problem. More than that, macro economy is a very complex thing, a cryptocurrency especially Stablecoin wouldn't solve it's problem.

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Quote from: Thehallows on August 17, 2023, 07:01:44 AM

Stability: Stablecoins are designed to be less volatile than traditional cryptocurrencies like Bitcoin or Ethereum. This stability could provide a more reliable medium of exchange and store of value, especially in economies with rapidly depreciating currencies.

Inflation Control: Stablecoins are typically pegged to a stable asset like a fiat currency or commodity, which could help countries better control inflation and manage their monetary policy especially in African countries.

Financial Inclusion: Stablecoins could increase financial inclusion by providing access to digital financial services for individuals who are unbanked or underbanked.

Reduced Transaction Costs: Digital transactions using stablecoins can potentially be more efficient and cost-effective compared to traditional payment systems, especially for cross-border transactions.

Basically the idea of CDBC or anything regarding governmental stablecoin basically, will not be free of corruption that governments are known for, so it is not going to be all that confusing to see this. I get that it may feel like it is not going to be all that easy to handle, but I think it would make sense to keep it going one way or another.

I hope that people could reach to a point where we could reach a greater profit eventually, but that should be free of governmental outreach. If they somehow get their hands on the crypto scene, even if they do not get a hold of bitcoin because it's decentralized, they could have 100+ billion worth stablecoin market and that should be something dangerous for all of us in the end.

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Quote from: Bushdark on November 10, 2023, 08:13:15 AM

Quote from: FinneysTrueVision on November 10, 2023, 01:37:11 AM

Failing economies could just adopt the US dollar if they think it will boost them in some way. Stablecoins could be useful if they were more widely accepted. Currently, their greatest benefit is as a store of value. The US dollar is still susceptible to manipulation and inflation but it will not depreciate as fast as a currency suffering hyperinflation.

I still have to rethink how stable crypto coin would hwlp a falling economy. Many of these stable coins are owned by individuals that are not attributed to the government. The government can decide to create it own digital coin just like China had done and that would help people to run transactions using the coin online especially for swapping and payment of services. Digital coin am be implemented by a country but that does not determine the growth of the actually economy.

You're thinking right. Stablecoin is always counted as a dollar, but it is just a surrogate om the dollar. So the government can make it illegal at any time. I think that when CBDC will be launched, stablecoins will be even less reliable than it is now.

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Quote from: mich on November 08, 2023, 02:13:34 AM

Well maybe they can and this is why Bank of England has now released a stablecoin regulation plan. They want to bring stablecoins in its real economy.
Executive director of Consumers and Competition at the Financial Conduct Authority Sheldon Mills had good things to say for stabelcoins. 'Stablecoins have the potential to make payments faster and cheaper for all, and that’s why we want to offer firms the ability to utilise this innovation safely and securely'.
https://www.bankofengland.co.uk/paper/2023/dp/regulatory-regime-for-systemic-payment-systems-using-stablecoins-and-related-service-providers

From the article they just want to regulate it so it can be better kind of, not like it's about to saving their economy with stablecoin
Relying on stablecoins to save an economy is like adopting the USD and expecting it to save your dying economy. A few months ago the British government was complaining about how the inflation of the US has affected the value of other currencies. Inflation in the US affected a lot of countries.
This might only work in a country that has a very poor currency but for countries that have a relatively stable currency, it would be a disaster. Imagine England ditching the pound for the dollar.

Also, a stable currency is not all it takes to save a dying economy. If the country doesn't produce a lot of stuff to export then they're still going to keep suffering.
If there is political instability, foreign investors won't flock to that country to invest.
Also, an economy relying on a stablecoin might be hit by inflation if the currency that the stablecoin is backed by (usually the US dollar) is hit with inflation.

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Quote from: Abiky on November 10, 2023, 07:32:00 AM

Launching a stablecoin or CBDC on a public blockchain network is a terrible idea. I think they're better off launching their own coin on a Blockchain under their control (private chain). It's the first time governments take such a venture, so anything can happen in the long run. With or without stablecoins, you can rest assured truly-decentralized cryptocurrencies won't be going anywhere soon. Just my thoughts Grin

I don't think any cryptocurrency except Bitcoin is truly decentralized. Regardless of their benefits and the biggest myth is stablecoin considered as a decentralized entity. Being said that creation of stablecoin itself is a controversial issue. Some say it helps traders whereas some say it is a way of the US government entering into the cryptocurrency world.

I am not saying it is a good idea by the UK what I am trying to say is that they think it is a good idea. You are right creating a CBDC on a public Blockchain using a third party vendor is terrible idea. What if the third party vendor in this case is an unknown entity of the government. There can be many reason for the government to come up with such an idea but in the end the main purpose of any government is to always monitor financial activities of its citizens.

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Quote from: FinneysTrueVision on November 10, 2023, 01:37:11 AM

Failing economies could just adopt the US dollar if they think it will boost them in some way. Stablecoins could be useful if they were more widely accepted. Currently, their greatest benefit is as a store of value. The US dollar is still susceptible to manipulation and inflation but it will not depreciate as fast as a currency suffering hyperinflation.

I still have to rethink how stable crypto coin would hwlp a falling economy. Many of these stable coins are owned by individuals that are not attributed to the government. The government can decide to create it own digital coin just like China had done and that would help people to run transactions using the coin online especially for swapping and payment of services. Digital coin am be implemented by a country but that does not determine the growth of the actually economy.

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Quote from: Bureau on November 09, 2023, 07:47:18 AM

All stablecoins are pegged to USD and if done correctly then it can boost the economy. In countries like Lebanon and others where there is too much fluctuation in local currency, using stablecoin would help them. In countries where the local currency is stable using stable coins would only destroy their economy. Then there is a big question as to why use a stablecoin as it will indirectly give economic control to the USD or the US government. What the UK government is doing just replicating their pound to a stablecoin and creating their form of CBDC I think.

If they're turning the pound into a stablecoin, then it would be no different than launching a CBDC to the public. I'm yet to see whenever stablecoins will last, or become a failed experiment. It's no secret that some stablecoins lost their peg in the past. It would harm the mainstream economy like never before. Ultimately, the plan is to make a digital cash system that's completely under the government's control.

Launching a stablecoin or CBDC on a public blockchain network is a terrible idea. I think they're better off launching their own coin on a Blockchain under their control (private chain). It's the first time governments take such a venture, so anything can happen in the long run. With or without stablecoins, you can rest assured truly-decentralized cryptocurrencies won't be going anywhere soon. Just my thoughts Grin

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Failing economies could just adopt the US dollar if they think it will boost them in some way. Stablecoins could be useful if they were more widely accepted. Currently, their greatest benefit is as a store of value. The US dollar is still susceptible to manipulation and inflation but it will not depreciate as fast as a currency suffering hyperinflation.

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Stablecoins have the potential to increase financial inclusion by providing access to digital financial services for individuals who are unbanked or underbanked. This can have a transformative impact on the lives of many people who currently lack access to traditional banking services.

Public acceptance is a major factor that need to be carefully addressed to ensure the successful implementation of stablecoins. If people will accept it and use much as fiat currency so it can be dominant currency.

There is a major weak point in Stablecoins that they can depegg anytime like we have seen a case of UST. That was on Luna Chain its also came down when Luna came down. So this is a major issue with stablecoins.

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I do not see how this works. Stable coins like USDT, USDC, etc are pegged to US dollar. Being pegged to dollar means that it will always maintain the same value as the US dollar. With that said, the difference it has from the actual US dollar is that it is a cryptocurrency that was made to escape volatility of most cryptocurrencies (like Bitcoin, etc). How then does this help a deprecating economy? I mean… it’s just the US dollar anyway. Is there something I missed or can someone make this make more sense?

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