Topic: The main harm of existing “Stablecoins” this is a pyramid scheme - page 3. (Read 354 times)
Stablecoins like USDT manage to live up to their names so far and keep the price at a very stable level. What they don't do is they don't solve the inflation which fiat suffers from. So is USDT=$1, but the dollar's inflation is an 8%, it means that people actually lost around 8% of their purchasing power (roughly, but actually they could lose way more on certain products and way less on others). Also, the op's right of the hypothetical risk of a stable coin just exploding eventually, when there's a panic selling event and people realize that this stability of stable coins isn't really backed by dollars or anything else of significant value.
The main harm of existing “Stablecoins" is uncontrolled inflation.
Today, anyone can create a demon of control-print their “Stablecoins” thereby increasing the total issue of the financial bubble, what do you think?
Today, anyone can create a demon of control-print their “Stablecoins” thereby increasing the total issue of the financial bubble, what do you think?
I do not entirely agree with this statement.
In my opinion, if we believe that 1 USDT (tether) = 1 US dollar, then no action by the US Federal Reserve will change the fact that money surrogates (digital copies of US dollars) circulate in the global monetary system. If usdt is used to pay for goods (works, services), then they increase the money supply and contribute to an increase in inflation.
The US Federal Reserve can take various measures to combat inflation (raise the refinancing rate, buy back government bonds), but if money surrogates are used in parallel for calculations, this has a negative effect on inflation growth.
Here the question is different ... Are stablecoins used to purchase goods (works, services)? Or are they virtual instruments for trading in the cryptocurrency markets?
https://bitcointalksearch.org/topic/109-5394081
The main harm of existing “Stablecoins" is uncontrolled inflation.
Today, anyone can create a demon of control-print their “Stablecoins” thereby increasing the total issue of the financial bubble, what do you think?
Today, anyone can create a demon of control-print their “Stablecoins” thereby increasing the total issue of the financial bubble, what do you think?
I do not entirely agree with this statement (sorry, replied to another post).
In my opinion, if we believe that 1 USDT (tether) = 1 US dollar, then no action by the US Federal Reserve will change the fact that money surrogates (digital copies of US dollars) circulate in the global monetary system. If usdt is used to pay for goods (works, services), then they increase the money supply and contribute to an increase in inflation.
The US Federal Reserve can take various measures to combat inflation (raise the refinancing rate, buy back government bonds), but if money surrogates are used in parallel for calculations, this has a negative effect on inflation growth.
Here the question is different ... Are stablecoins used to purchase goods (works, services)? Or are they virtual instruments for trading in the cryptocurrency markets?
Stable coins is uncontrolled inflation? Yes and No.
But the government are the ones that are controlling the value of fiat, they devalue it when necessary. If stable coin is backed by or pegged with fiat, that means its value in price is equivalent to the price of fiat, just like USDT (stable coin) and USD (fiat). If fiat is devalued, then automatically stable coins are devalued.
But some stable coins are pegged with unstable coins just like wBTC that is pegged with bitcoin, or just like some cryptocurrencies like paxgold are pegged with gold price, those are not inflationary coins.
But the government are the ones that are controlling the value of fiat, they devalue it when necessary. If stable coin is backed by or pegged with fiat, that means its value in price is equivalent to the price of fiat, just like USDT (stable coin) and USD (fiat). If fiat is devalued, then automatically stable coins are devalued.
But some stable coins are pegged with unstable coins just like wBTC that is pegged with bitcoin, or just like some cryptocurrencies like paxgold are pegged with gold price, those are not inflationary coins.
The main harm of existing artificial “Stablecoins” is uncontrolled emission and, accordingly, uncontrolled inflation.
Today, anyone can create and print their “Stablecoins” without control, thereby increasing the total issue of the financial bubble. Is it possible to do without artificial “Stablecoins” based on Fiat, which essentially create a pyramid scheme or not, what do you think?
Today, anyone can create and print their “Stablecoins” without control, thereby increasing the total issue of the financial bubble. Is it possible to do without artificial “Stablecoins” based on Fiat, which essentially create a pyramid scheme or not, what do you think?
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