Is empty wealth being created through stable coins?

[fasdorcas]

Stable coins claim that they are backed 1:1 with their corresponding fiat currency, so when they mint new coins, this should mean that they have locked in the same amount of fiat money. But this is done in a centralized manner, we can't verify that they indeed hold that amount of fiat currency or that they won't break the rules at any given time.
To me stable coins look like fiat squared - fiat has value for as long as the government is willing and capable to support it, and stable coins are exactly the same, but they also depend on fiat.

By itself, the idea of creating stable coins is very good and I believe that they perform useful functions when working with cryptocurrency. We can’t say whether they are validated with ordinary currency, digital copies of which are and cannot be verified. Well, not everyone is suspected of fraud. While I am very pleased with the appearance of stable coins.

The basic function is when it comes to hedging your assets in fiat during crazy downtrends like what we are seeing now in the space, but majorly, what is most important is how these stable coins get to do this. For now, we are beginning to see a lot of them popping up gradually, so in a way I just want to imagine if this is just another level of scam following what has been going on with Tether over the years? Printing money out of the blue, and then listing on an exchange and before you know, they exit the space eventually. I cannot say for the ones that claim they have a full fiat backing and they will be transparent enough to allow auditing. However, it all is, I simply just see stable coins, at least the legit ones for now as necessary evils.

[BoitCoinZen]

I thought it was a money-printing action but I think the money-maker got money from someone. This is a fraud. If this continues, our market is in serious trouble.

There are so many contrasting and contradictory views about the artificial growth and the troubled economy. Others argue that it is nothing but a scam and others call it a blessing for it has the capability to replicate the wealth.

[Menawi12]

I think stable coin like USDT created back up by US Dollar in the bank. They can not print or mint stable coin without guarantee on banks deposit because its againts with the rules.

[Ozero]

I still have a positive attitude to stable coins, because they really facilitate the work with cryptocurrency. You can doubt everything, you can say that the whole cryptocurrency is absolutely empty and unsupported digital money. And it will also not be very far from the truth. Therefore, while there is an opportunity, you need to use a cryptocurrency, while not forgetting about the moderate risks that it has.

[jacafbiz]

I have no issue with Stablecoins if the team can proof indeed they are backed with real USD or Fiat it is backed. We truly need them, because people don't need to be jumping in and out of the market from Crypto to Fiat every time there is a market movement. I believe Tether situation this year is even one of the things responsible to the bear market. If it is done right good luck to everyone

[wxa7115]

In my opinion, stable coins are one of the most dangerous and shady assets that you can put your wealth in.

Firstly, stable coins represent fiat currency which is in itself something that has been historically depreciative.

Secondly, stable coins are not even actual fiat currency. There is no way the majority of the time for the investor to be 100% sure that the company issuing stable coins have completely full reserve all the time. And even if they can, there is no way of guaranteeing that the company will be willing to redeem their stable coins for fiat on demand.

So you're absolutely right. In certain instances of fractional reserve being used in stable coin issuance, which I believe is extremely probable for the majority of centralized stable coins, it is essentially no different than printing money out of thin air. It's only because stable coins are perceived to be backed fully and redeemable at all times does it have any value. But in reality, it's probably nothing like that.

This is a big problem with those coins, instead of trusting the government and their fiat now you are trusting a third party company that is holding enough currency in reserve for each unit of their cryptocurrency they print, so now you are in an even worse position than those that are only holding fiat because now you need to trust not only the government but also the people behind that coin, I know that those that created those coins are trying to give investors an easy way to transfer their cryptocurrencies to an asset similar to fiat.

But they are creating just another liability and a false sense of security among people, so for those that want to get out of the market for some reason make sure you get fiat and not one of those coins.

[Burogh]

Before creating or minting a new stable coin, developers should have dollar to back up the coin. It will avoiding from creating stable coin from thin air and i think its good for market if more stable coin created because more money come to market

[Netnox]

You can't call it fake money or empty wealth. Because most of these stable coins are backed up by real assets. In the case of Tether (USDT), it is backed up by US Dollars held up in bank accounts (although the audits are still ongoing).

[guoyu78]

Stable coins claim that they are backed 1:1 with their corresponding fiat currency, so when they mint new coins, this should mean that they have locked in the same amount of fiat money. But this is done in a centralized manner, we can't verify that they indeed hold that amount of fiat currency or that they won't break the rules at any given time.
To me stable coins look like fiat squared - fiat has value for as long as the government is willing and capable to support it, and stable coins are exactly the same, but they also depend on fiat.

By itself, the idea of creating stable coins is very good and I believe that they perform useful functions when working with cryptocurrency. We can’t say whether they are validated with ordinary currency, digital copies of which are and cannot be verified. Well, not everyone is suspected of fraud. While I am very pleased with the appearance of stable coins.

The basic function is when it comes to hedging your assets in fiat during crazy downtrends like what we are seeing now in the space, but majorly, what is most important is how these stable coins get to do this. For now, we are beginning to see a lot of them popping up gradually, so in a way I just want to imagine if this is just another level of scam following what has been going on with Tether over the years? Printing money out of the blue, and then listing on an exchange and before you know, they exit the space eventually. I cannot say for the ones that claim they have a full fiat backing and they will be transparent enough to allow auditing. However, it all is, I simply just see stable coins, at least the legit ones for now as necessary evils.

I do have a problem with stable coins. They are just empty sacks of nothing and they created this huge hype for bitcoin by just putting money into the market. I don't care if they are backed 1:1 in fiat currency (which I do not believe at all) but even with that in mind they used it for themselves and bought as much bitcoin as they can afford by putting the tether out in the market and that created a bubble for bitcoin that took the price from lower ends to 20 thousand dollars and as soon as their buy orders dried up and stopped the price went down like crazy causing a lot of people to back away from crypto investment. If they didn't do that we wouldn't had the 2017 price soar which is a shame but we also wouldn't had this year long crisis in our hands neither.