Topic: The Doom of the Stablecoin Industry? - page 2. (Read 1501 times)

Exactly. At least, the heavy regulation or ban of stablecoins is just a proposal by central banks worldwide. The final decision will lie in governments themselves. So far, it's been nothing but "talks" without concrete actions whatsoever. I believe that no one cares, since the crypto economy is still smaller than the global mainstream economy. Rest assured, that once crypto becomes a serious threat to the existence of Fiat, governments will do anything to try to stop it. While they may succeed in cracking down on exchanges, they'll never be able to prevent people from using crypto as an alternative to the existing monetary system.

Centralized stablecoins might see their demise in the long run if they're unable to comply with regulations from governments worldwide. But decentralized stablecoins will live longer because they're entirely governed by the Blockchain. Centralized stablecoin issuers are the ones that need to be worried as they could face fines from the government. The average person can simply switch to another centralized or even decentralized stablecoin if one of them fails. While the demise of centralized stablecoins could affect the crypto market in the short term, decentralized ones might take the lead in recovering the same at its fullest. Just my thoughts

This is to be expected. Digital coins from the very beginning posed a threat to centered coins. And it was clear that sooner or later the countries would find a threat in them.

It doesn´t mean anything until it happens, we read news almost everyday that crypto should be banned, regulated, but the reality? Nobody cares, I am here for pretty long time and I don´t see anything what goverments have done against cryptocurrencies. 

That's certainly true, mate. Any centralized stablecoin with assets on a bank, can be taken down easily by mainstream governments. The only way around this is if the stablecoin issuer holds physical cash or gold reserves outside of a bank. Even so, governments could hold the issuer liable for such practices. That's what you get with a centralized stablecoin. In case governments decide to go against the entire stablecoin industry in general, decentralized stablecoins will be considered as the "Plan B" to save the liquidity of the crypto market.

For now, USDT controls most of the stablecoin market. Most (if not all) cryptocurrencies rely on it to preseve their liquidity and reduce volatility. Imagine what would happen if Tether goes all the way down the drain? It would've been a disaster for the entire crypto market. Prices for each cryptocurrency may take much longer than usual to recover because of this. I'd wonder how decentralized stablecoins like DAI or bitUSD will come into play once centralized stablecoins cease to exist? In the uncertain world of crypto, anything could happen. Let's hope that governments cooperate with the crypto industry for a properous decentralized economy in cyberspace. With a friendly stance on crypto, it'll be a win-win situation for all ends. Just my thoughts

I do not see any reason for that. All that exchanges need to do is to comply with country regulations. Governments are very happy to get another source of taxes to increase spending's. They do love spend.

Do not be so confident when you say "stablecoins will exist as long as national currencies do" , what if the feds drag stablecoin companies to a halt and give exchanges the order to delist all stablecoins or their license be nullified to operate? I'm not praying for that and also believe stablecoins will keep being in existence, but it's not a 100% surety. We share same believe, don't get it twisted ☺.

Stable coins will exist as long as national currencies will exist. When they will collapse so will stable coins. hen will be left only useless asset pegged coin like Xaurum or similar that are backed by gold.

The central banks feels like they are threatened and stablecoins are eating up some portion of their control, that does make sense if they are being aggressive nowadays and trying to trigger distrust among people just because stablecoin is "Crypto" and it doesn't align to their ideal. curiois which step which they would take in the future.

It seems to me that all the negativity of central banks, which is aimed at stable cryptocurrencies, is primarily related to their desire to control cryptocurrency, which is equivalent to the national currency, but does not require any verification for use.  In addition, you need to take into account those problems that SlowMist reported, which refers to the issue of fake USDT on the OMNI protocol.  To date, there is still no detailed information about which exchanges were damaged and their volume, but this situation is already generating a certain distrust of this stable coin.

I don't know why central banks wants to ban stable cryptocurrency, but if it is true, then it will be bad.
Many traders and investors in crypto using stable coin like USDT to convert their fiat into crypto which make they easy to manage their money.

Stable coins like usdt without government backing will still survive the litigation and power plays on it because it majorly a community stable coin. The importance of stable coins to cryptocurrency trading cannot be overemphasized and all efforts by government to truncate it should be frowned at.

All the stable coins that keep reserve collateral in bank account can be blocked and frozen by simply block
the deposit in the bank. Imagine if the bank blocks the account in the bank for unknown reason
or it receives an order from the state to block the account of the stable coin than this
coins will become worthless.

There is nothing secure in using this centralized stable coin especially USDT for
which is even unknown if there is any collateral in the bank account and therefore
if is printed out of thin air it can be used to  manipulate all the prices of other coins in the crypto market.

Look at this nice article that explains a lot:
https://www.coindesk.com/the-stablecoin-surge-is-built-on-smoke-and-mirrors

Exactly. Once they prevent stablecoins from being used in the mainstream world, the whole crypto market will be negatively affected in the long run. Governments and central banks know that stablecoins act as a bridge between Fiat and crypto itself. Their stable prices across the market, could allow most people to use stablecoins on top of traditional Fiat. That's not what central banks want, since they'll be losing profit in the long run. After all, most of their gains are attributed by the fees they collect from everyday people. This will be a never-ending battle, as crypto proves to threaten the very existence of Fiat as we know it. With a decaying economy because of the COVID-19 outbreak, banks are worried that people will use crypto on top of Fiat for mainstream transactions.

In the end, centralized stablecoins could cease from existence due to government pressure. Only decentralized stablecoins will prevail in the long run because no single entity controls them. Everything is governed by the Blockchain itself, bringing a truly self-autonomous De-Fi system to anyone around the world. Stablecoins of this type are based on algorithms, than being truly backed by Fiat reserves. This means that they could lose their stability every once in a while, leading to temporary losses. But at least, it's better to have a decentralized stablecoin that mimics Fiat than having nothing to "hedge" your crypto with. Let's see how the outcome of government regulations towards the crypto industry turn out to be within a couple of years from now. If all goes well, the crypto industry will grow in mainstream adoption like never before. Otherwise, it'll only be known and used by a very small minority of people. Just my thoughts

Monetary stability is one of the key factors of progress. It Wil really be a really big blow to have stable coins banned by governments (if they can). I see they have understood how calm the crypto lovers are with the present availability of stable coins to cushion the effects of crypto volatility and that's what they aim to take away because it's only a matter of time before crypto and its stable coins becomes a household name.

the rate at which stablecoins are been printed is getting out of hand. usdt has been minting more coins ever since the pandemic keep started. the central bank knows that fiat is currently loosing value and the economy need to be maintained. people has the freedom and choice to choose what way to run their financial services and also how to transact their business.

It has always been like that since paper money came into existence a long time ago. An alternative form of money which is outside the control of third-parties, removes governments' ability to enforce control over their citizens. I'm still confident that truly sovereign money like Bitcoin and Ethereum will survive in the long run. But centralized stablecoins could see their doom in the future, if governments ban them in their entirety. Only the stablecoin issuer will be affected, but the average person will still be able to use decentralized stablecoins like DAI or bitUSD. It's expected to see negative reactions from central banks against stablecoins, since these digital assets greatly resemble traditional Fiat money. The decision of allowing the use and issuance of centralized stablecoins will ultimately lie in the governments themselves.

Nonetheless, the stablecoin industry could flourish in the long run if governments take no action against it. My hope is that startups and companies issuing centralized stablecoins could work together with the government in order to make the crypto world a better place. But if that doesn't happen, crypto's prices could become even lower in the long run as centralized stablecoins provide the most liquidity to the market. Regardless of a stablecoin ban in the mainstream world, crypto will still be useful as an alternative to Fiat thanks to its decentralized and censorship-resistant design. Just my opinion

Central banks and government thrive in the control they have on citizens through financial systems so it's not really ba surprise m but I hope that government's become progressive and allow decentralized financial systems.

I hope so. Because if governments ban stablecoins in its entirety, the whole crypto market will be negatively affected. After all, stablecoins are the ones who "pump" the liquidity of the crypto market. What governments can do is regulate centralized stablecoins more thoroughly in order to bring legitimacy to the space. People will surely use centralized stablecoins in the mainstream world, if governments help to reduce the number of scams or fraud in the industry. As far as decentralized stablecoins go, it'll be nearly impossible to enforce regulations on them. Stablecoins like DAI and bitUSD have a higher chance of survival than those that are centralized (Tether, and Binance USD) because of the lack of a middleman/central operator. In case governments "hit the kill switch", decentralized stablecoins will remain alive and actively traded across the Blockchain.

Ban or no ban, crypto will be here to stay for a very long time. "Bankers" have been pushing governments against crypto, because they're quickly losing ground in the world's economy. They don't want an alternative financial system bringing back people power over their own money. Something that cannot be controlled by central banks and governments worldwide, could see constant opposition from these entities over time. Thanks to the decentralized and open source nature of the whole crypto/Blockchain industry, it'll be impossible to enforce a ban at will. Just my thoughts

Stable coins can not outrightly be ban from the market, they just might comply with the complain and worries. Each country will just have to come up with their laws as regards these stable coin usage. How do you think this will be out-rightly ban from the market?

I have a similar thread here: FSB on Global Stable Coins (GSC).