[setgree]

I wish you luck with this. Stablecoin adoption in the developing world is a potentially large and legitimate use case for cryptocurrency.

An essay by Ben Kuhn [0], ex-CTO of Wave, raises the most salient objection here. Of the four problems Wave needs to solve, the hardest is providing "an easy way for users to exchange their balance for cash and vice versa." But "Cryptocurrency actually makes this harder."

Say your uncle in Pakistan buys some USDC. What can he do with it? Just hold on until he needs to cash out for a house or whatever? Will any stores accept it as currency? Are you imagining a Venmo/Zelle-like application on top where users can then exchange them among themselves?

There are already plenty of ways to buy stablecoins. Adoption as a means of exchange is the hard problem. Do you envision this coming about organically? If so, how?

[0] https://www.wave.com/en/blog/crypto/index.html

[nailer]

I have no idea about Pakistan but in the US you can swap the USDC to PYUSD and send it to anyone’s PayPal account using Solana in a second. From the PayPal account account, it can be sent one to one to your bank account.

[notTooFarGone]

And why should people do that over just using paypal?

[nailer]

The parent asked:

> Of the four problems Wave needs to solve, the hardest is providing "an easy way for users to exchange their balance for cash and vice versa."

Just using PayPal would mean missing out all the benefits of crypto. I do it because defi yields are much higher than a bank. People in their target audience may do it because international transfers cost less than a fraction of a penny.

[awesome_dude]

One of the things I have wondered about stable coins is - why bother with them, and just buy the currency that is (supposedly) underpinning the stable coin.

I mean, if currencyBob is pinned to the USd, what advantage is there to buying currencyBob, and not just USD

[jgilias]

This is discussed in some other threads here. But basically, if you live in a jurisdiction where it’s easy and safe to get and hold substantial amounts of USD, this is not for you.

The reality in many places is that getting your hands on USD happens through grey-market street dealers who charge exorbitant conversion rates, and the only way of holding them is under your mattress because the local banking system can’t be trusted. As in, if you’re able to get a USD bank account (this is a big if), you likely won’t be able to actually withdraw your USD in any substantial amounts when the need arises.

[awesome_dude]

Sorry for the late reply - and I'm not sure if this is covered in other threads... but...

I'm not seeing an argument for an account denominated in crypto as being advantageous over an account on the same platforms denominated in USD (or Euro or whatever)

The argument you seem to be putting forward is one of "digital is superior to physical" - which might be accurate, but still leaves open what currency is best.

edit: It could also be said that the crypto "wallet" is transferable amongst exchanges, but finding someone willing to trade physical goods or services for that crypto is the next problem, whereas the USD is already accepted/easily transferable to people with accounts.

[KaiserPro]

Its basically a way to say "look there's no risk!" because it can never[1] go below the peg point of the currency it's linked to. You'll see that the value rises (because of course its new and sexy, and the pool is small so it doesn't take much to change the market value) but "never" goes below 1:1 or what ever the peg is.

The problem is, because its crypto, its fairly easy to trace who owns what and who trades with whom. so if you're trying to avoid local or international laws, this isnt for you. You're far better off buying assets that are reasonably easy to liquidate.

[1] pegged currencies require 1:1 reserves for it to be "safe". At some point its impossible to protect against runs, if you don't have enough reserve to buy back the coin

[nprateem]

It's a tax dodge IIUC. You buy crypto, it increases in value. If you sell it you may have to pay capital gains tax on any materialised gains.

Swap it for another pretend token however and no tax liability since the gain isn't crystallised. Swap back to another coin when you want and rinse and repeat.

[beoberha]

Not true - swapping is a taxable event. Doesn’t matter which coins

[toomuchtodo]

Stablecoins represent digital fiat when integrating with traditional financial rails or holding a currency in a regulated account is challenging or impossible.

[renewiltord]

Bro you try doing this in these places. In Sri Lanka during their civil war when I was there you couldn’t convert INR or USD to LKR for any reasonable exchange rate anywhere except for the shady black market currency exchange, e.g. on the (aptly named) Front Street in Colombo.

It’s like asking why don’t you just buy 2CB from the store instead of online on the dark web.

And the additional problem is that once you leave that location everyone knows you’re carrying around proper bills of whatever currency. Asking for trouble, mate.

[CMCDragonkai]

It skips the intermediaries. It's a more direct accounting system.