Privacy-oriented stablecoins

[Alpen]

Libra's biggest failure was not being able to please the regulators. Since it was centralized, it was easy enough to take down. But truly-decentralized cryptocurrencies? That's another story. Would you imagine decentralized, private stablecoins hitting the market? It would result in a complete "nightmare" for governments. Especially if developers/issuers of such stablecoins remain anonymous.

Since truly-decentralized private stablecoins would be unregulated, they will only be backed by algorithms (or collaterized with traditional cryptocurrencies such as ETH and BTC). Sounds like a far-fetched idea, but not impossible to achieve. This is much needed, especially when existing stablecoins can be easily tracked, traced, and manipulated by companies. We'll see what happens in the long run...

Remember UST?

That was a truly decentralized stablecoin — no central issuer, algorithmic backing, and massive adoption. It helped catapult Terra (LUNA) into the crypto top-10.

But it also triggered one of the worst crashes in crypto history. Its collapse wiped out billions, shook investor confidence, and arguably set off the last crypto winter.

So yeah, decentralized private stablecoins sound great in theory — no tracking, no censorship, complete freedom. But in practice? If the peg fails or demand dries up, it could destabilize the entire market.

Maybe it's actually a good thing we don't have one right now. Some experiments are better left in the lab — at least until we’ve learned how not to blow up the ecosystem.

[nicolas222]

To me, on the other hand, seems like a good idea,foremost privacy first even in the world of cryptocurrencies.

[Abiky]

Remember UST?

That was a truly decentralized stablecoin — no central issuer, algorithmic backing, and massive adoption. It helped catapult Terra (LUNA) into the crypto top-10.

But it also triggered one of the worst crashes in crypto history. Its collapse wiped out billions, shook investor confidence, and arguably set off the last crypto winter.

So yeah, decentralized private stablecoins sound great in theory — no tracking, no censorship, complete freedom. But in practice? If the peg fails or demand dries up, it could destabilize the entire market.

Maybe it's actually a good thing we don't have one right now. Some experiments are better left in the lab — at least until we’ve learned how not to blow up the ecosystem.

Yes. But I'm talking about stablecoins with privacy features. And UST, is not one of them. Although, it was a truly-decentralized stablecoin backed by algorithms. With UST's disastrous collapse, I think crypto industry players learned a valuable lesson. Perhaps, this will encourage developers to improve algorithmic stablecoins in the long run.

Again, the idea of making a truly-decentralized stablecoin with privacy features backed by algorithms, sounds like a dream. But not far from becoming a reality anytime soon. The main issue would be dealing with the regulators (government). They're the ones that outright reject anything they can't control or enforce the rule of law. It's no wonder why Monero has been a constant target of said entities. We'll see what happens in the future.