That’s also a downside: When your funds can be transferred away by anyone who happens to acquire the key without triggering any fraud prevention or additional verification checks, losing your entire bank account at 4AM Sunday morning becomes much easier.
In addition to the security issues, they would have to deal with non-negligible transaction costs every time they wanted to convert it to actual money so that they could purchase something. If they were using it as an investment, they had to deal with the opportunity cost of underperforming $SPY.
This isn’t just a problem in the Netherlands or a thing of the past. 2025 actually saw the highest number of attacks ever recorded [0].
There are ways to prevent this. Like using multi-sig with geographical separation (so you can't move funds alone) or setting up forced time-delays. Ultimately, being your own bank is a massive responsibility, and I think too many people take that reality too lightly.
You can redeem stablecoins in blocks of a million if you are a registered bank. This is the only way to redeem them. Otherwise you can only trade them.
No, it's not. It's not possible to come to the US soldiers with a bunch of US dollars and some demands and get what's demanded in return for the dollars.
Only trust of the other market participants backs the US dollar.
Seigniorage accrues to private entities instead of the state, enriching the owners of those private entities rather than everyone in the state that issues the currency.