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by yieldcrv 235 days ago
people don't exit

its just like your brokerage account, imagine if Schwab issued a stablecoin for every deposit someone made and only delete some of that stablecoin when they redeem

you'll find that people deposit and trade, they keep their balances there their entire life and beyond. when they trade, they are selling the stablecoin to someone else, someone else could redeem but they aren't either. stablecoins are liquid and useful, they have passive income capabilities while holding your principle value

so for Schwab's reporting, the balances always increase as people deposit more whenever they get their paycheck

this is what you're seeing with Tether, and all other leading stablecoins, as they grow at the same pace as they capture the same market

when actual traditional finance brokerage firms start issuing stablecoins, you'll see the same thing, the stablecoin just offers transparent real time behavior into their customer deposits

the only time stablecoin balances go down, and subsequently treasuries are offloaded behind the scenes, is when someone redeems a stablecoin for fiat currency. this isn't necessary, people don't want fiat or don't need to get fiat by redeeming it