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by kenniskrag
1556 days ago
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Nexus Mutual InsurAce is a small insurance, which isn't backed by a bigger insurance. Traditional insurances can cross protect the risks e.g. fire & water, europe & asia or sell some risks to a reinsurance company. Maybe there is no regulation on how much reserves in fiat they have to keep. So no not the same protection. |
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However did you know that FDIC insurance only requires 1.35% reserves? Of course they can also have the FED print money which drives further inflation for everyone.
Net, net, no the guarantees are not the same but government-backed insurance isn’t as safe as we would like to assume.
Also, outside the US, deposits are only 100% insured up to very modest limits. Banks offer no insurance above these modest limits.
As a timely example in Ukraine only deposits up to 200,000 UAH are insured. At the current UAH:USD conversion rate, that means only up to $6,600USD of deposits are protected. Anything over that amount has zero coverage.
Crypto stablecoins can provide options for those in need. Please don’t immediately dismiss them simply because you personally may not see the use-case.