[Ancapistani]

What advantage would a stablecoin have over using the underlying currency directly?

It has the significant disadvantage of adding an additional trust entity (the backing bank) which could prove untrustworthy.

Over a long enough timescale, I would argue that all backing banks have proven to be untrustworthy.

[TenJack]

Doesn’t it seem concerning to tie a countries currency to something so volatile that it could literally halve over night? Not trying to argue. Just trying to understand.

[cwkoss]

Fiat currencies can go to zero in an instant via political changes. (Ex, see indian demonitization in 2016).

All forms of money have risks. I think the diversification of supporting BOTH USD and BTC seems to get a bit of the best of both worlds.

[TenJack]

Right so why not USD coin instead of Bitcoin?

[cwkoss]

USD-pegged stablecoins kind of have the worst of both worlds - the risks of crypto AND the risks of fed monetary policy. Stablecoins shouldn't be used as a store of value, only as a medium of exchange.

[TenJack]

You just said having USD was part of the best of both worlds (despite fed monetary policy) and Bitcoin has the risk of crypto as well. Seems contradictory

[cwkoss]

USD and Bitcoin each have risks and disadvantages.

USD-denominated stablecoins have the union of the risks and disadvantages of both.