Heineken-Ashi said:
fauxstradamus said:
Heineken-Ashi said:
Who here can explain what this stablecoin bill does? I think I have a decent grasp, but I'm not the most versed on stable coins.
In the current iteration it does not allowing for yield bearing stablecoins to holders. This is very likely a consequence of large bank lobbyists wanting to hold about $6Trillion in assets hostage. Think about checking accounts, savings accounts that pay <0.5% interest while the banks are making 4-5% in treasuries. This is also the reason Tether is such a monster profit machine right now and I'm sure they don't want to pass on yield to holders either but I don't know
What stablecoins will do is significantly remove friction of moving money and significantly decrease time for transactions to clear. We are talking 3 days in current system to maybe 3 seconds. Also without limits on amount of funds moved per day.
Eventually I think it won't matter about getting yield directly from USDT/USDC, bank of america stablecoin, whatever. Tokenized money market funds will expand and already exist. With speed and transparency of the money movement, funds can be automatically "swept" back and forth from tokenized money market to USDC for example. It's literally a $6T dollar unlock.
I believe also the stablecoins will be backed by US treasuries so it's also a way to maintain dollar dominance and keep demand for US treasuries
Just my 2 cents
Exactly what I am fearful of.
Banks lend their "reserves" to the FED. These can't be used for liquidity. They are merely an accounting trick. The FED gets reserves and then pays banks a higher rate that banks have to pay to the FEd if they borrow money. It's nonsense.
What this bill does, is allow banks to issue stablecoins pegged to something like treasuries (Which are not ****ing stable), using their reserve balance. They are essentially trying to monetize their reserves that they are getting paid interest on.
And what I'm fearful of, is that IF IF IF the stablecoin values drop due to a drop in treasuries, this is essentially the mechanism that just created bail ins. Sorry mr. checking account holder, your cash you want to pull out is in this Amegycoin. And if you pull it out now, you will get less than the cash you think you have. Please wait for the coin to recover its value before pull out. And maybe even.. they dont LET YOU pull out until the stablecoin recovers.
Someone tell me Im wrong please. I want to be.
You have a much deeper understanding on the insides of the tradfi system and I respect your knowledge.
What I can't understand from your fears is how a fractional reserve system that still relies on "unstable treasuries" doesn't present the same problem that you worry about with stablecoins.
I will add this as well. The GENIUS Act mandates that stablecoins, which are cryptocurrencies designed to maintain a stable value, be backed by a 1:1 reserve of high-quality liquid assets (HQLA), such as U.S. dollars, short-term Treasury securities, or central bank reserves. This means that for every stablecoin issued, the issuer must hold an equivalent amount of these specified assets as backing.
One of my concerns is transparency from stablecoin issuers. Will there ledgers be fully transparent on the blockchain? And yes Prog could these be a precursor to CBDC style invasion of privacy?
Maybe I'm wrong but this seems to be an argument between FDIC "insured" fractional banking vs non FDIC insured fully pegged "digital dollars"
