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by fintech_eng 88 days ago
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.

1 comments

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

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

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

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...

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