I like USDe, but it's not completely decentralized. You still have to trust whoever's trading the basis like you have to trust Tether/Circle to trade treasuries.
I think it's pretty easy to buy the coins, regardless of government intervention. Countries (ie China, Nigeria) have tried and failed to restrict access to cryptocurrencies. Whether you get good execution is a separate issue- my point is that stablecoins enable you to execute these trades in the first place.
Agree with the posit- stablecoins grew a lot during periods of strict monetary policy (ie capital outflow from China starting in 2015, hyperinflation in 2023).
Note my original post said disruptive, not good. Meant it in the truest sense of the word; both good and bad comes out of it.
Just because badly managed local currency is required for taxes doesn't mean that most people in that country _must want_ to hold it. Plenty of trivially obvious evidence to the contrary
I assume you've never experienced hyper-inflation? If you have, do you think it's fair that you were forced into a hyper-inflationary currency? And, if given the means to, do you think it's fair that people _should_ have the ability to choose?
I think the most disruptive thing about stablecoins is the ability to opt-into your monetary system of choice.
It's hard for the average non-US person to opt-into the US financial system. Sure, they could hold dollars in banks, but local monetary policy can nix that privilege at anytime by imposing foreign exchange controls. It's happened before, in some of the largest economies in the world: China in 2015, India in 2013, Argentina in 2011.
The current way users solve this problem requires a lot of resources. That's why you usually only see rich people have Cayman accounts, Canadian real estate, and shell companies in Panama. Stablecoins on permissionless blockchains make this process 100x more accessible for the average person.
So yes, stablecoins currently let you circumvent regulation.
But regulation can be a prison where you can pay to be free.
So what happens when it costs nothing to get out of jail? What kind of strains do this place on economies that people escape, as well as the economies that people join?
Thought experiment: how much USDT is made unredeemable every year? including through lost private keys, freezing related to sanctions, etc
If you think 1% is a reasonable number, that’s 1BN per year at current market cap. Tethers been around for 10 years. Dead funds also compound.
Let’s say Tether was grossly insolvent (ie only had 50% of reserves) for the first 10BN in market cap (in other words, for the first 5 years of their existence). In addition to the 6BN+ of interest income they earn every year, there’s 1BN of reserves that will never get redeemed added every year
If Tether was insolvent before, they just need time to change that
adding onto this, i as a citizen of <high inflation country> who buys dollars from the national bank are probably holding digital dollar receipt anyways, since most foreign dollar holdings are held in nostro accounts at US correspondent banks.
if you trust your banking system to be a better custodian of your money than Circle, you're one of the lucky ones. billions of people in the world don't have that kind of luxury (see: https://www.bbc.com/news/world-asia-68778636), hence a part of the reason why stablecoins have grown to a little under a quarter trillion