[amarant]

What is the point of stable coins? Like why does anyone buy them?

It seems to me that their initial value is 1usd per token (or some other fiat I guess) and that's also the roof of their value: they kinda guarantee that they won't become more valuable than that.

They are less usable than fiat: more businesses accept fiat than crypto, especially weird and small coins like all stable coins are.

There isn't really a floor to their value, as demonstrated here.

I see plenty of downsides of owning one of these coins, but not a single upside?

Yet people apparently do buy them, so what is the upside? There must surely be something that's good about them?

[mememememememo]

Why have cash? A: as an intermediary between better uses of money (buy cool stuff or invest)

So why use stablecoins and not use cash? When you want to quickly convert to/from a token (60 second not 6 days), but for a short period have a stable value. Or you want to avoid banks.

I.e. trading, gambling, drug deals, money laundering, etc.

[fintech_eng]

They’re not really meant to go up in value.

The main use is just having something dollar-like that you can move around easily. That’s useful outside the US, but also for plenty of people inside the US depending on what they’re doing; especially businesses that have a hard time getting or keeping normal banking (cough gambling, porn, weed cough).

They’re handy inside crypto since you can move in/out of other assets without touching a bank. And sometimes you can earn yield on them, which is part of the appeal (with the usual “this can blow up” caveats).

Also, there’s a reason every company wants to launch one: if you control the stablecoin, you get the float and the rails. That’s a pretty nice business if people actually use it.

If you already have solid access to USD and don’t care about that flexibility, they’re less compelling.

But yeah, not risk-free at all (depegs, issuer risk, etc). And honestly there probably isn’t much real need for dozens of slightly different stables beyond the business incentives.

[amarant]

Ah, so we're basically battling the prudishness of VISA and MasterCard?

That... Actually makes sense.. Which is a rare feat for crypto!

[Saline9515]

Stablecoins present less frictions, have cheaper transaction costs and less intermediaries susceptible to block them. It greatly increases the velocity of money.

[amarant]

What utterly horrendous payment solutions are you using that have more friction than crypto?

The ones I use are several orders of magnitude less friction and most are 100% free. The ones that do have a cost (for recipients outside Scandinavia basically) are still way, waay cheaper than crypto transactions.

[Saline9515]

Many banks from where I come from (France), will require, for larger payments:

- Print a paper form, fill it by hand, scan it and send it. A human will review it next week and agree (or not).

- If you receive money, you have to prove the origin. If you can't, or if the bank finds it unsatisfactory, they'll freeze it. Often, they'll freeze your account right away. You have little legal recourse.

For the record, I once wanted to buy a car in a foreign EU country. I had the contract, it was from a recognized dealership, etc etc. The bank refused to send it. I had to open a Wise account, wire the money there, and then sent it to the dealership.

Overall banks are nice, most of the time, but can create a lot of problems when you need them, especially now that the EU is having an AML inflation under the US and FATF pressure and everything is managed by AI with no human in the loop.

I understand that you couldn't care less about people who aren't having the exact same life as you, but maybe consider that one day it will change and you'll need a freer transaction infrastructure.

And crypto transactions are almost free nowadays, if you avoid Ethereum and Bitcoin. A transfer on Arbitrum L2 costs 0.002$[0]

[0]: https://arbiscan.io/tx/0x92122f1df5e8811f4d0cbf44f210074f5bb...

[abigail95]

How do you have a payment system that is free? Who pays for the infrastructure?

[amarant]

I was referring to this one: https://en.wikipedia.org/wiki/Swish_(payment)

No sign-up fee, no recurring fee, and no transaction fee. I guess it's a loss leader for banks? But if one bank stopped supporting it, they would find themselves without customers in less than 24 hours, so it's a worthwhile loss I guess

[ezfe]

To take advantage of the ability to send money that way without the volatility

[JumpCrisscross]

Let’s be honest, it’s principally for illicit use, a tiny fraction of privacy folks and then a lot of people caught in between who don’t understand yield but want to bet on a volatile asset and have to use a stablecoin to go between. (Because the backers of the volatile thing are doing something illicit.)

[Saline9515]

You are a decade late, nowadays stablecoins are commonly used in international trade. Most Alibaba sellers accept USDT nowadays, same for Indian ones.

[JumpCrisscross]

> stablecoins are commonly used in international trade

For a rounding error value of "commonly," sure. (Catering to a financially-constrained market is good business. But it, by definition, will never be an important one in the grand scheme of things.)

[Saline9515]

Something can be common, while not representing a large volume. And given the current aggressive policy of the US administration, you may soon have to find new payment rails for your international trading, depending on where you live.

As always, things are certain until they aren't. Technological innovation always starts with fringe use cases, before becoming more widespread.

[stevage]

I think the idea is if you're attempting to actually use crypto in the way that you would normally use money (ie, to buy/sell stuff) then you don't want the volatility. So in theory, it takes away the volatility while living within the crypto ecosystem.

But obviously...things happen. Just like cash is usually relatively non-volatile, but financial crashes happen.