Topic: The Doom of the Stablecoin Industry? (Read 1518 times)

This is true if you talk about minority that is using bitcoin.
It easy to pick one person like they did in Minneapolis 4 (armed) : 1 (unarmed)
In case that would be a majority using bitcoin or other currencies than scenario would not be possible either.

the government cannot stop bitcoin, but the government can stop the person who wants to use bitcoin. if people will be afraid to go to jail for using bitcoin then the popularity of cryptocurrency will fall down

Many governments are simply afraid that stablecoins will turn out to replace traditional Fiat currencies we know and love today. They don't want to lose control over the world's economy, after all. People who use stablecoins get the "best of both worlds". Blockchain technology promises immutability, and most of all, censorship resistance. This allows anyone to gain full control of their funds without third-party intervention. Combining this, and the stability of real-world currencies, makes stablecoins a huge contender of the existing monetary system. I think that governments will either enforce heavy regulation on centralized stablecoins or simply ban their usage. Decentralized stablecoins like DAI and bitUSD will remain "untouched" since they're not issued by a single entity.

One thing for sure is that governments became concerned about stablecoins right after the announcement of Facebook's Libra. If it wasn't for that, they wouldn't have been too worried about it. There has been so much opposition from mainstream governments against Facebook's planned stablecoin for the world. My guess is that they'll never allow Libra to become a reality, as they'll lose control over the world's monetary system. Even if they did, Libra would be heavily regulated and monitored which would greatly defeat the purpose of crypto/Blockchain technology. In the end, centralized stablecoins will see their "doom" while decentralized ones will survive for a very long time. As long as people support these types of currencies, they won't be going anywhere. Just my opinion

We do not exactly know what will happen when the regulations come. Nobody knows, how goverments will clasify cryptocurrencies, as a form of money? Then all cryptocurrencies will be illegal because creating own money is illegal! And here is Bitcoin, thanks decentralization you can´t stop it and send someone to the prison. 

As world leaders understood what a global stablecoin could achieve, they are afraid of the consequences as these coins takes over their individual money scams that are making them extra money. China's push to digital yuan is another desperate move to replace USD as a global trading currency as it gives US a great power of leverage. Facebook's Libra's intention too were the same. The leaders would do everything to stop a global currency but in the end they'd agree upon a neutral one as no one would win the ultimate coin war.

Banning stable coins, even their own like the Digital Yuan? I can´t see that happen. As soon as they see a chance of how to make money with cryptos they will be very welcoming and open to free the markets from restrictions so everybody, mostly them, can have a piece of the cake. The stablecoins will be necessary to trade, since I´m certain that the whole world will not agree to one single coin, like a "Globo" or whatever else. They might work hard against the Libra coin because this one has the backup to overturn the national currency and in worst case replace it make a private company responsible for the currency stability in the country.  Not the best solution, and the FED will agree to that

I honestly don't think that these banks will be interested into making their own stablecoins considering the user of crypto sitll not massive and even if there's profit in it, it's just a pocket money for them. Most of stablecoins until now are owned by private company which reserve their fund in bank, in other word, the banks actually indirectly participating in the existence of these so called stablecoins.

That's being too far to be a reality. China is the only country that wanna follow the revolution on the digital economic industries but it's really different with another country that thing their traditional economy still made them all confidence. As long as the stable coin if fully audited and it has been getting approval from the local authorities and it will be fine.

In the near future, the number of stable coins will even increase. However, these will be stable coins of the central banks of states, that is, their digitized currencies. The spread of coronavirus and the need to disinfect paper money is pushing states to digitize their national currencies. States and international financial organizations express concern only for stable coins of various private and other commercial structures, the circulation of which is really associated with a certain risk. Therefore, in general, there is no threat to the existence of stable coins.

I do not think so. Stablecoin can still function as it should in the cryptocurrency ecosystem with or without government support.
We must indeed realize that there is still a gap between cryptocurrency and government, full of pros and cons. But we don't need to worry, just simply understand and obey government rules. The whole world knows the potential of cryptocurrency, so not all governments strictly prohibit, there are certain rules that limit. So we make the best use of it.
Stablecoin continues to function with its unique niche, providing security for those who are still adapting to volatility.

That's certainly true, mate. If governments ban stablecoins from widespread use, people could simply resort to Fiat directly via a bank account. Stablecoins are only there to provide users the "best of both worlds". Sometimes you'd like to have the stability of Fiat with the security/reliability of Blockchain. With a stablecoin, it's possible to achieve this. While the market is saturated of both centralized and decentralized stablecoins, there's a wide variety of options to choose from.

For the sake of the stablecoin industry's growth, it's best that governments regulate centralized stablecoins more thoroughly. Instead of banning them, governments could work together with crypto companies and startups in order to make the world a better place. One of the good things centralized stablecoins have over decentralized ones is that they're backed by real-world assets. Most (if not all) centralized stablecoins are backed by Fiat reserves on a real bank. That's not the case with decentralized stablecoins, since they're backed by algorithms more than anything else. Stablecoins of this type (like DAI and bitUSD) have a higher risk of losing their stability in the long term. Consider NuBits (USNBT) which was once a decentralized stablecoin with a price of $1 USD. It's now dead lost, worth cents on the market.

Nonetheless, the fate of stablecoins will depend on how companies and startups cooperate with governments worldwide. As long as there is a regulatory-friendly environment for centralized stablecoins, there should be nothing to worry about. Ultimately, people like you and me will end up using decentralized alternatives if governments decide to ban centralized stablecoins in their entirety. A stablecoin ban will make little to no difference, if there's a way to trade crypto against Fiat in the mainstream world. Just my opinion

Lol, how does banning stablecoins have anything to do with the whole cryptocurrency market.
Yes, I do know that I wouldn't like them to ban the stablecoins, but if they do, I don't think it's going to have any effect on Bitcoin, for example: causing the price to fall. The only thing is that there is going to be a reduction in the market total market cap, but it's not going to reduce the price of others.

I am not really going to blame them, they are trying to save themselves from losing relevance, because cryptocurrency seems to be replacing everything this time around and they don't want to lose it to cryptocurrency. They might not worry about volatile cryptocurrencies, because they feel that people will be afraid to adopt the unstable coins.

Not close to happening though. What about USD, they can't ban it.  If its really going to be ban, they will likely face the most decentralize stablecoin which they couldn't control anymore such as the DAI.

Its best to just leave it alone, its not just USD that has stablecoin, we do have Yuan and KRW, INR and etc. Are they all going to end up getting ban too?

 

Stablecoins are easier to ban than crypto because the issuers are known. Trust me if they ever manage to sue and ban and imprison Tether owners then every exchange that is regulated will delist and remove USDT. And then you can guarantee it will lose the USD peg in real value.

As long as it has created by human and the possibility for the government to trace the creator of the decentralized apps or something else will always there. You must take a look at how SEC was tracking the creator of etherdelta even if that was never being published. Government hates bitcoin caused by the potential to disrupt the traditional economy.
This stable coin will exist forever.

I will wait and watch how this is going to be possible for the government, something decentralized can't be controlled by other power organizations, is this not one of the reasons why government hates Bitcoin and privacy coins till date?

Even if at all they are able to ban stable coin which am still wondering how they are going to succeed in that aspect,  people will result in using fiat most, stable coin are some how playing the role of fiat in a digital way, and since almost all crypto users prefer to use stable coin I guess the government are not happy about it, still looking for a way to inflict pain on crypto since they can't outright ban it, and knowing the importance of it to crypto community it becomes their point of target.

They will make their own crypto currency as a solution. They know they ban stable coin didn't give any profit for them.

Take a look to Chinese governement who create remindi based on blockchain system, their intention is to ban stable coin like USDT, TUSD and etc that being used by their citizen.

It will be different when reminbi has been using by their citizen. The governement will try to get punished for their citizen who using it. And it will make their money fiat will be used by most people in this world.

Exactly, the government has got other things to worry about and cryptocurrency is the least of them. Moreover they are aware of things going around with crypto, they are no fools running a country even if many people think that way.

Fact that so many casinos are running on crypto and government does not do anything to stop them means that they are not willing to crackdown on them. The people who are actually getting punished are the money laundering cases.

For stablecoins, I dont see anything good except that they can be a good intermediary position while trading. Like when you sell Coin1 (hypotheical) for USDT, you get some USDT, but your target is another coin, say Coin2 but since you sold Coin1 at bull market, Coin2's price is high and so just hold USDT for now and buy Coin2 when bear market starts. That way you gain a multiplied amount of Coin2 than if you would have bought just after selling Coin1.

That is so true. I don't think the government or banks can dictate the fate of those decentralized stablecoins. However, the lifespan of those centralized stablecoins will not easily vanished as they can't be ban easily. They need to undergo a lot of talks, hearings and discussions because a government can totally terminate its presence. And I don't think that will happen very easily. They might end up utilizing stablecoins once they fully understand the benefits of using stablecoins.

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).

The normal response of a conventional system is almost equal to that of a stable coin. Previously many people were worried about using cryptocurrency because of its high volatility, but with the presence of stable coin it can be overcome so that cryptocurrency can be an effective payment alternative.
The adoption of cryptocurrency is increasingly widespread and this cannot be stopped just like that. Although there are many pros and cons, cryptocurrency is a very good development to overcome various problems.

It is yet to be seen, do remember btc and other cryptocurrencies were banned in a lot of countries a couple years ago but they were still traded as normal, most of the countries now have developed pro crypto rules and i think stablecoins will also stay it is just a matter of time when governments will understand them.

It's possible to ban centralized stablecoins by penalizing the issuer. But it's not feasible to do so on decentralized stablecoins like DAI or bitUSD, because they're not issued by a single entity. The best thing governments can do is impose heavy-handed regulation on centralized stablecoins if they allow it to be used by people in the mainstream world. This would be much of a concern to the stablecoin issuer, than the end user. I think that with greater regulations on the stablecoin industry, the lesser scams or fraud will exist in the crypto space. It'll be disastrous for the crypto market if stablecoins cease to exist as most cryptocurrencies depend on them for liquidity. Some say that Tether (USDT) largely contributed towards Bitcoin's astronomical rise in price back in 2017. If it ends being "banned" by governments worldwide, the entire crypto market will experience a massive downfall in price like never before.

Nonetheless, it's not surprising to see central banks suggesting governments worldwide to act against stablecoins since they see crypto as a threat to the existent monetary system. These entities don't want people to use an alternative payment system that's outside of their scope. They'd want something that can be easily controlled and manipulated at will. Which is why, they'll do anything to try to stop the crypto revolution. Their efforts will be in vain, thanks to the decentralized and open source nature of the Blockchain space. Just my thoughts

I wonder why they wants to prohibit stable crypto coins. Stable coins are good, there is no manipulation price, it is stable.
Then i guess they don't want peoples adopting cryptocurrency and no longer using real money on banks anymore.
Crypto community must keep decentralized to support crypto adoption, so we can independently using crypto coins without any centralized party prohibit the community.

It looks like that crypto become a thread nowadays.  Because it help people's economy in easy way.  It already happen that stablecoins influence people' life easily and they accept it without worry.  Maybe people get bore with the bank central's system.  It depends on the government.  They can not prohibit digital coin and stable coin because they become people need.

Stable coins are also digital coins and I don't see them being banned if the rest of crypto won't be banned. Only thing is that strict regulations may be imposed on them.

The final decision lies on the governments themselves. I believe that they'll have success taking down centralized stablecoins. But they'll have a hard time trying to do the same with decentralized stablecoins like DAI and bitUSD. Central banks have seen crypto more as a threat lately because they prove to be an "exit route" for the currently deteriorating economy. They want to stay in control of people's money no matter what. An alternative payment system which is outside of the scope of a central authority, goes against what banks have established in the first place. Eventually, centralized stablecoins will have to comply with heavy-handed regulations or be left out of the game. There's no reason to worry about a stablecoin ban harming the entire crypto space, since it was designed to be completely independent from the world's monetary system.

Long before stablecoins even existed, Bitcoin and other cryptocurrencies performed well within the mainstream world. I know that volatility reduces one's spending power in terms of Fiat, but that's not an issue when using crypto directly for daily payments. Stablecoins are helpful when you want the convenience of Fiat with the power of Blockchain technology. If they'd cease to exist, then you'd just cash out your crypto to real Fiat at any time. I believe that central banks are just giving these suggestions to governments worldwide to spread FUD within the crypto/Blockchain space. No matter what their efforts may be, they'll never be able to take down the industry in its entirety because of its decentralized and censorship-resistant nature. Just my thoughts

Too many stablecoins now, spreading out liquidity in a bad way

For conventional financial systems, this is like a threat indeed. Moreover, stable coins offer the stability that is similar to fiat or the price that is the benchmark, with a combination of transparency, privacy, low cost, fast processing, which is in cryptocurrency. So that people who are afraid of cryptocurrency volatility can still enjoy crypto with very little volatility using stable coins. That is why stable coins are very effective as an alternative payment.

Those enacting this rule, are they actually in charge of the entire world economy because I am surprised that their rule will now make Stablecoins become so useless. Never, it is not going to happen. Well, that might work in their own jurisdictions and to maybe the exchanges that they have control over. As far as the crypto space is concerned, we are operating a decentralized system, although, most exchanges are centralized, I do not think they will be subject to their dictatorship.
I believe that these people are trying every means possible to be in control, most especially over everything.

Well, i have always had this idea in mind that if cryptocurrencies are ever going to be used for payments stable coins are likely going to be used. i believe this is the reason why the Central Banks want strict laws be made against its issuance because I don't think any trader would want to be caught in the volatile swings of other major cryptocurrencies in this industry.

Stablecoin is important for crypto. If you cannot convert your currency to usd then how will the market operate? That's why stablecoin is needed. But ordinary traders have no knowledge of the stablecoin they currently have. Which of these stablecoin prints they wish, which is really a concern. They have no real usd reserve they only print fake supplies. Because there is no audit. So banning those who are involved with such activity will not be bad.

Not only central banks but also governments do not like stabecoin, the reason is simple because they can not completely manage them.
Perhaps in the future governments will put in place many rules to restrict the development of stabecoin but it is very unlikely that they will completely ban it.

Normally, when we are talking about banks cooperating with governments to ban some crypto, I would 100% be behind crypto, I mean we are all here because we like crypto and how could we say we want governments to ban bitcoin for example, we wouldn't be able to do that and I personally would never want something like that and would be very much against it.

However in this precise scenario maybe the banks and the governments are right? Think about it, these people are creating fake digital currencies and they tell you that it worths 1 dollars each and you believe them, sometimes you can actually withdraw the money for it as well so it looks legit but how about we all try to sell our usdt all together at the same time and see how they bankrupt in a minute, they won't be able to pay them all because they do not have as much dollars to pay you as much as the tether they sold you. Which is why heavy regulations should definitely happen.

Normally, when we are talking about banks cooperating with governments to ban some crypto, I would 100% be behind crypto, I mean we are all here because we like crypto and how could we say we want governments to ban bitcoin for example, we wouldn't be able to do that and I personally would never want something like that and would be very much against it.

However in this precise scenario maybe the banks and the governments are right? Think about it, these people are creating fake digital currencies and they tell you that it worths 1 dollars each and you believe them, sometimes you can actually withdraw the money for it as well so it looks legit but how about we all try to sell our usdt all together at the same time and see how they bankrupt in a minute, they won't be able to pay them all because they do not have as much dollars to pay you as much as the tether they sold you. Which is why heavy regulations should definitely happen.

I think this article is just a click bait, it makes no sense at all what was describe in it makes no sense. How can government sensor stable coin like DAI for example, it is peg to Eth  price or other cryptos, exchange can decided not to trade them agree but country can not do anything about them. If it is a fiat backed stable coin like USDT and USDC then  they can

This is pretty funny. Half a year ago, these same people spoke about the possibility of full approval of stable coins, and now they complain about their insecurity for banks.
I do not think that they will be able to ban stable assets, it will be ridiculous.
In addition, this can only be done within the framework of certain jurisdictions, although even in this case it is not clear to me how they are going to track the user's trading on the exchange, or they will simply close them.

It up to each country and government to implement on how to control cryptocurrency in general, not just stable coin like USDT. For all I know, government label and category stable coin into cryptocurrency that carries risk even greater than normal cryptocurrency like BTC, ETH,... If you don't trust the fiats then it's the same for stable coin. Instead of backup by a legitimate government, stable coin back up by what? Don't tell me you hoarding stable coin and hodl it like it was a normal cryptocurrency.

I think you should take this as a serious problem. I remember when bitcoin has already threatened by so many countries in the world to be banned but it never happens till this time. Just think about the central bank will need more time to give admission to the possibility for the stable coin to replace fiat in the future.

The only reason for governments are always imposing strict rules and guidelines on every momentary system is, money laundering as it may result in aiding terrorist activities. Governments may think about prohibiting every derivative instrument when they are easily redeemable AND ALSO when they comes with LESS FLUCTUATIONS.

Why governments are not bothering about every other derivative instruments? Because, they are being traded with unlimited fluctuations; they may value $1 today and may value $100 tomorrow and vice versa also true. So, the chances for those derivatives to be used as a momentary system is less which means less chances for being used for money laundering.

But, here the special case of stablecoins is, even it is also a derivative, it may fluctuate +/-5% or hardly +/-10% on day to day basis. If you ignore these fluctuations, then you may assume they are purely stable like fiats. Then they got more chance for being used for money laundering. So, more chances for governments to ban them at any time like how they did with Liberty Reserve payment processor (the prominent payment option in mt.gox).

I can understand their plight and I know where they are going. If this ban will be only for stable coin then it will have a huge effect. They are just looking for a way to cripple or stop the crypto market growth. I hope they don't succeed in doing this.

Stablecoins are one among the most important part of the decentralized crypto economy. You could never depend on fiat all the time for trading in bitcoin and certain popular stable coins like USDT and TUSD are necessary for huge volume tradings. In general, crypto currency markets are highly volatile in nature and you will surely require a stable coin to trade and receive the profits.

If for instance, a person has 7000 tether and if BTC dumps to 6000 USD overnight and pumps again the following day, it would be very much difficult for the traders to withdraw each and every time to their fiat money or to the banks. If banks see through the +1000 USD profit within a day or two, they would be questioning up the trader. These kinds of situations occur when the person has  7000 USDT but if they are trying to trade with 5-10 bitcoins, they might be facing 5000-10000 USD profits and loss within hours which would certainly make the trader even more questionable.

Apart from the above mentioned facts, bitcoin market is certainly new and we need time for them to mature over the period. Until then, we could be USDT for real world transactions. I always use bitcoin for global transactions but some traders might not go well while considering volatility. Hence, stablecoins might rise in adoption which certainly could pose a risk for governments and the banking system. The government is trying to minimize the usage of bitcoin and also trying to reduce the exposure of people towards cryptocurrency in general which wouldn't last longer.

I see one huge thing there, and that is fear of the crypto space and what it is going to achieve in the near future. Talking about stablecoins, they play in huge role in this crypto space and without them I wonder what will happen when there is a bear market and so on. Also, although the government have various powers to do things but placing a ban on stablecoins might not pull through as it will affect a lot of things maybe restrictions on its use outside the crypto space will set in. This is just the beginning and it's a matter of time for cryptocurrencies to start taking over gradually, and nothing will stop its advancements. Lastly I think it's time for decentralized stablecoins to be fully active.

I guess that central banks are starting to "feel the heat" of the crypto/Blockchain revolution. They don't want people to use an alternative financial system that's decentralized by design. After all, they want to maintain power/control over the world's economy. Since decentralized cryptos cannot be controlled, they become a threat to the existence of the current monetary system.

I don't think that central banks will succeed in "phasing out" stablecoins in their entirety, but they could encourage governments to regulate the industry more thoroughly. Decentralized stablecoin solutions will remain untouched, but those offered by a central authority (like it's the case with Tether and Binance USD) will be the ones heavily impacted by fierce regulations imposed by governments worldwide. This is good for the end user in the sense that corruption and fraud is reduced at a minimum. No matter what governments' efforts may be, they cannot disrupt decentralized alternatives to existing Fiat. Of course, it's still possible that decentralized stablecoin developers would comply with governments' demands by modifying the code. But the fact that they're open source, allows anyone to launch a "better version" that has not been "tainted" by governments' interests.

Nonetheless, we'll see how this plays along as people begin to lose trust in the world's banking system. The more people use stablecoins over regular Fiat, the worse it'll be for central banks' prominence within the mainstream world. With stablecoins you have the "best of both worlds" combining the power of Blockchain technology and the stability of Fiat. Eventually, governments will launch their own CBDCs which would serve the same purpose as a centralized stablecoin. Only decentralized ones will make the difference as it's outside the scope of third-parties. As long as there are people using and supporting the Blockchain industry, nothing should go wrong. Just my opinion

Nope, its been done before. If they really will ban it all they could have done that to tether before BTC blow up this big. Its the stablecoin that runs all the markets and now the rise of DAIs is coming for the fight of decentralization which they wanna try killing. These collateralize stablcoins are growing, EOS are also planing to have its DAI all the other platforms are going to follow soon.

I think they can only ban any stablecoin on the grounds of scam, fraud or if they detect any other illegal activity other than that i am quite sure that they cannot be banned without any solid reason, stablecoins are valuable product of cryptocurrencies and just like crypto they will continue to be used even if some country announce ban.

The topic was started in the G20... they calls stablecoins a systemic risk. And is really fun because with printed money the government's just can print more money and increase their debts, but is a different story with stable coins. Govs can't print them and that's why they are afraid.

If those coins get banned that would be really hard for the crypto world.

I think there is no way any government will ban stablecoins, infact there use will increase in coming years, banks should work to upgrade themselves with blockchain tech and also integrate all services related to crypto and stablecoins, if they just kept complaining they will be left far behind.

They are making CBDC and that's why eliminating the competitor would be ideal for them. I think it's going to be a tough time for stable coins and who are using stable coins here? are you many to worry about this?
Because me, I don't.

Yes the threat remains to stablecoins but the real threat feom crypto and all these stable coins is to banks themselves because even if these stablecoins get banned large countries are coming with their own national coins that will be fiat backed so in short the coming days will not be good for banks.

Thats it! the Central Banks are already threatened by the existence of Stable-coins. by the way, I'm not against the proliferation of those so-called Stable coins in the market. but it should be regulated strictly, in that case, we will be able to identify those Stable-coins that are not truly back by a stable asset like Fiat, or Gold. The Stablecoins should stay in the crypto market and remain as an option in the ever-changing cryptocurrency industry. 

A well decentralized stablecoin can't really be stopped in my opinion.
However, stablecoin developers could consider what the governments are worried about and try to implement them in their codes. If it's about taxes, then  implement a tax system. You could basically list out those things the governments are worried about and try and implement them on stablecoin codes

Sometimes I wonder why developers don't consider creating a stablecoin that is not backed by any country fiat currency...so the governments don't have good reasons to bother them. Just create a cryptocurrency that is as stable as fiat currencies but not tied to any fiat currency!

By the way, the governments could really benefit from allowing "their stablecoins" to be used by cryptocurrency communities. They could simply suggest how they want the stablecoins to work and benefit them, then the communities and developers could implement the suggestions as long as they don't affect the principles of decentralized crypto.

I thought government can have access to only centralized coins, stable coins like DAI and others are decentralized, it will be stupid if the stable coin team submit to whatever the government planned, crypto space can survive without stable coins but believe me this will have bad impact on traders

I can't deny the fact that the entire cryptocurrency market will become more riskier if stablecoins got ban by government, people will be caught off-guard during pump and dump action of cryptocurrency especially during the dump period and there won't any safe-Haven to run to expect FIAT which won't flexible for usage by trader considering the very number of exchanges that offers FIAT trading pairs

I can agree with all the stated recommendations made about controlling actual existing stable coins due to the reasons detailed in the article. But i noticed that the reasons don't include the risk of people who may lose their deposits in investing in those tokens called stable who are backed by nothing. This leads me to think to other cryptos that may get a price stability and becomes less volatile, this also includes bitcoin himself, would it also be considered as a threaten to the global financial stability.

One of the suggestions is outright prohibition, doesn't seem like it's the most likely candidate.

There is a zero percent chance that stablecoins will be banned, if that's the case, you'll have to ban practically every other derivative instrument too. Goodbye futures, options and swaps for all markets, not just cryptocurrencies.

These are basically derivatives of fiat, just like people trade futures for wheat, oil and gold. Some futures are physically delivered, just like how stablecoins can be redeemed.

They're just feeling threatened, and who can blame them!

According to Crypto Briefing, central banks have suggested governments worldwide to ban stablecoins from existence (or at least, impose heavy-handed regulation). It seems that they see stablecoins as a threat to the existing monetary system. Central banks have recommended to prohibit the use and issuance of decentralized stablecoins (like DAI and bitUSD) within the mainstream world. If governments follow their recommendations, does this mean that the stablecoin industry is doomed?

I wasn't surprised about the news, since central banks and governments have long dominated the world's economy. While crypto is still decentralized, the market is largely dependent on Fiat as we speak. A ban on stablecoins might be harmful for the price (and possibly mainstream adoption) of crypto. Blockchain tech will still be alive and running, no matter what governments' actions will be. But mainstream people will look elsewhere due to decaying prices across the market.

For those unaware, here's the link to the article by Crypto Briefing: https://cryptobriefing.com/central-banks-recommended-ban-stablecoins/

What are your thoughts?