[Liron]

Let me help explain whether blockchains are useful or not: They're not.

The US gov let Circle be a less-regulated bank than other banks. This is called "regulatory arbitrage". You can take advantage of it by checking the box that you have a "blockchain".

Stripe noticed "wow, things labeled blockchain are nice for some people to use" because of this dumb inconsistent banking regulation situation.

Stripe doesn't mention that the underlying tech is impotent, they just have to play along, and here we are.

[chhxdjsj]

Less regulated? Circle has to keep 100% reserves backing all accounts whereas most US banks operate a low fractional reserve and lend mostly to billionaires funding moderately risky leveraged commercial real estate.

[mdorazio]

You’re conveniently ignoring what “reserves” means in the GENIUS act. Unlike regular banks, Circle can use US Treasuries instead of cash so that they earn interest and prop up US government debt at the same time. It’s a clever scheme, but not the same as being forced to hold fiat reserves.

Many other banking regulations also don’t apply. No FDIC insurance and most importantly none of the regulations that apply to true fiduciaries since they are only “custodians”.

[Liron]

Yep, I mean regulated with respect to who's allowed to offer and hold digital accounts in the currency. Circle itself may not do anything too funky, but big chunks of USD then get stored elsewhere online for banking-like activity in a way that wouldn't be legal with USD — right?

[garbthetill]

ngl you are not wrong, I've never thought of it like that. Is there an argument that it can never really be regulated? sure if the US gov stops circle from buying treasury bills & you cant get a stable usd, whats stopping you from pegging it to another currency like a yen, pound, euro etc or gold, silver etc

I think it is useful and is here to stay

[Liron]

It's entirely at the whim of the US government whether they allow non-KYC foreign people to have USDC accounts.

Right now they say USDC:Yes and USD:No. They could easily say yes or no to either one at any time. Blockchain as technology is irrelevant.

[LudwigNagasena]

Technology is relevant because it is the very reason they have to say yes to USDC and try to at least partially regulate it. If they could, they would say no and even ban it completely, but they can’t.

[richardwhiuk]

They can, it’s just this administration isn’t interested in doing so.

[Liron]

I don't know what you mean. Circle is a US company that needs to follow US laws. There is no USDC without Circle.