The Doom of the Stablecoin Industry?

[Banadony]

the rate at which stablecoins are been printed is getting out of hand. usdt has been minting more coins ever since the pandemic keep started. the central bank knows that fiat is currently loosing value and the economy need to be maintained. people has the freedom and choice to choose what way to run their financial services and also how to transact their business.

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[Bitstar_coin]

According to Crypto Briefing, central banks have suggested governments worldwide to ban stablecoins from existence (or at least, impose heavy-handed regulation). It seems that they see stablecoins as a threat to the existing monetary system. Central banks have recommended to prohibit the use and issuance of decentralized stablecoins (like DAI and bitUSD) within the mainstream world. If governments follow their recommendations, does this mean that the stablecoin industry is doomed?

I wasn't surprised about the news, since central banks and governments have long dominated the world's economy. While crypto is still decentralized, the market is largely dependent on Fiat as we speak. A ban on stablecoins might be harmful for the price (and possibly mainstream adoption) of crypto. Blockchain tech will still be alive and running, no matter what governments' actions will be. But mainstream people will look elsewhere due to decaying prices across the market.

For those unaware, here's the link to the article by Crypto Briefing: https://cryptobriefing.com/central-banks-recommended-ban-stablecoins/

What are your thoughts?

Monetary stability is one of the key factors of progress. It Wil really be a really big blow to have stable coins banned by governments (if they can). I see they have understood how calm the crypto lovers are with the present availability of stable coins to cushion the effects of crypto volatility and that's what they aim to take away because it's only a matter of time before crypto and its stable coins becomes a household name.

[Abiky]

Monetary stability is one of the key factors of progress. It Wil really be a really big blow to have stable coins banned by governments (if they can). I see they have understood how calm the crypto lovers are with the present availability of stable coins to cushion the effects of crypto volatility and that's what they aim to take away because it's only a matter of time before crypto and its stable coins becomes a household name.

Exactly. Once they prevent stablecoins from being used in the mainstream world, the whole crypto market will be negatively affected in the long run. Governments and central banks know that stablecoins act as a bridge between Fiat and crypto itself. Their stable prices across the market, could allow most people to use stablecoins on top of traditional Fiat. That's not what central banks want, since they'll be losing profit in the long run. After all, most of their gains are attributed by the fees they collect from everyday people. This will be a never-ending battle, as crypto proves to threaten the very existence of Fiat as we know it. With a decaying economy because of the COVID-19 outbreak, banks are worried that people will use crypto on top of Fiat for mainstream transactions.

In the end, centralized stablecoins could cease from existence due to government pressure. Only decentralized stablecoins will prevail in the long run because no single entity controls them. Everything is governed by the Blockchain itself, bringing a truly self-autonomous De-Fi system to anyone around the world. Stablecoins of this type are based on algorithms, than being truly backed by Fiat reserves. This means that they could lose their stability every once in a while, leading to temporary losses. But at least, it's better to have a decentralized stablecoin that mimics Fiat than having nothing to "hedge" your crypto with. Let's see how the outcome of government regulations towards the crypto industry turn out to be within a couple of years from now. If all goes well, the crypto industry will grow in mainstream adoption like never before. Otherwise, it'll only be known and used by a very small minority of people. Just my thoughts

[freigeist]

All the stable coins that keep reserve collateral in bank account can be blocked and frozen by simply block
the deposit in the bank. Imagine if the bank blocks the account in the bank for unknown reason
or it receives an order from the state to block the account of the stable coin than this
coins will become worthless.

There is nothing secure in using this centralized stable coin especially USDT for
which is even unknown if there is any collateral in the bank account and therefore
if is printed out of thin air it can be used to  manipulate all the prices of other coins in the crypto market.

Look at this nice article that explains a lot:
https://www.coindesk.com/the-stablecoin-surge-is-built-on-smoke-and-mirrors

[SolarWindMiningCompany]

Not only central banks but also governments do not like stabecoin, the reason is simple because they can not completely manage them.
Perhaps in the future governments will put in place many rules to restrict the development of stabecoin but it is very unlikely that they will completely ban it.

Stable coins like usdt without government backing will still survive the litigation and power plays on it because it majorly a community stable coin. The importance of stable coins to cryptocurrency trading cannot be overemphasized and all efforts by government to truncate it should be frowned at.

[fosco333]

I don't know why central banks wants to ban stable cryptocurrency, but if it is true, then it will be bad.
Many traders and investors in crypto using stable coin like USDT to convert their fiat into crypto which make they easy to manage their money.

[Spaffin]

It seems to me that all the negativity of central banks, which is aimed at stable cryptocurrencies, is primarily related to their desire to control cryptocurrency, which is equivalent to the national currency, but does not require any verification for use.  In addition, you need to take into account those problems that SlowMist reported, which refers to the issue of fake USDT on the OMNI protocol.  To date, there is still no detailed information about which exchanges were damaged and their volume, but this situation is already generating a certain distrust of this stable coin.

[TastyChillySauce00]

It seems to me that all the negativity of central banks, which is aimed at stable cryptocurrencies, is primarily related to their desire to control cryptocurrency, which is equivalent to the national currency, but does not require any verification for use.  In addition, you need to take into account those problems that SlowMist reported, which refers to the issue of fake USDT on the OMNI protocol.  To date, there is still no detailed information about which exchanges were damaged and their volume, but this situation is already generating a certain distrust of this stable coin.

The central banks feels like they are threatened and stablecoins are eating up some portion of their control, that does make sense if they are being aggressive nowadays and trying to trigger distrust among people just because stablecoin is "Crypto" and it doesn't align to their ideal. curiois which step which they would take in the future.

[Febo]

Stable coins will exist as long as national currencies will exist. When they will collapse so will stable coins. hen will be left only useless asset pegged coin like Xaurum or similar that are backed by gold.

[Bananington]

Stable coins will exist as long as national currencies will exist. When they will collapse so will stable coins. hen will be left only useless asset pegged coin like Xaurum or similar that are backed by gold.

Do not be so confident when you say "stablecoins will exist as long as national currencies do" , what if the feds drag stablecoin companies to a halt and give exchanges the order to delist all stablecoins or their license be nullified to operate? I'm not praying for that and also believe stablecoins will keep being in existence, but it's not a 100% surety. We share same believe, don't get it twisted ☺.

[Febo]

Stable coins will exist as long as national currencies will exist. When they will collapse so will stable coins. hen will be left only useless asset pegged coin like Xaurum or similar that are backed by gold.

Do not be so confident when you say "stablecoins will exist as long as national currencies do" , what if the feds drag stablecoin companies to a halt and give exchanges the order to delist all stablecoins or their license be nullified to operate? I'm not praying for that and also believe stablecoins will keep being in existence, but it's not a 100% surety. We share same believe, don't get it twisted ☺.

I do not see any reason for that. All that exchanges need to do is to comply with country regulations. Governments are very happy to get another source of taxes to increase spending's. They do love spend.

[Abiky]

All the stable coins that keep reserve collateral in bank account can be blocked and frozen by simply block
the deposit in the bank. Imagine if the bank blocks the account in the bank for unknown reason
or it receives an order from the state to block the account of the stable coin than this
coins will become worthless.

There is nothing secure in using this centralized stable coin especially USDT for
which is even unknown if there is any collateral in the bank account and therefore
if is printed out of thin air it can be used to  manipulate all the prices of other coins in the crypto market.

Look at this nice article that explains a lot:
https://www.coindesk.com/the-stablecoin-surge-is-built-on-smoke-and-mirrors

That's certainly true, mate. Any centralized stablecoin with assets on a bank, can be taken down easily by mainstream governments. The only way around this is if the stablecoin issuer holds physical cash or gold reserves outside of a bank. Even so, governments could hold the issuer liable for such practices. That's what you get with a centralized stablecoin. In case governments decide to go against the entire stablecoin industry in general, decentralized stablecoins will be considered as the "Plan B" to save the liquidity of the crypto market.

For now, USDT controls most of the stablecoin market. Most (if not all) cryptocurrencies rely on it to preseve their liquidity and reduce volatility. Imagine what would happen if Tether goes all the way down the drain? It would've been a disaster for the entire crypto market. Prices for each cryptocurrency may take much longer than usual to recover because of this. I'd wonder how decentralized stablecoins like DAI or bitUSD will come into play once centralized stablecoins cease to exist? In the uncertain world of crypto, anything could happen. Let's hope that governments cooperate with the crypto industry for a properous decentralized economy in cyberspace. With a friendly stance on crypto, it'll be a win-win situation for all ends. Just my thoughts

[r32godzilla]

It doesn´t mean anything until it happens, we read news almost everyday that crypto should be banned, regulated, but the reality? Nobody cares, I am here for pretty long time and I don´t see anything what goverments have done against cryptocurrencies. 

[swivel1983@gmail.com]

This is to be expected. Digital coins from the very beginning posed a threat to centered coins. And it was clear that sooner or later the countries would find a threat in them.

[Abiky]

It doesn´t mean anything until it happens, we read news almost everyday that crypto should be banned, regulated, but the reality? Nobody cares, I am here for pretty long time and I don´t see anything what goverments have done against cryptocurrencies. 

Exactly. At least, the heavy regulation or ban of stablecoins is just a proposal by central banks worldwide. The final decision will lie in governments themselves. So far, it's been nothing but "talks" without concrete actions whatsoever. I believe that no one cares, since the crypto economy is still smaller than the global mainstream economy. Rest assured, that once crypto becomes a serious threat to the existence of Fiat, governments will do anything to try to stop it. While they may succeed in cracking down on exchanges, they'll never be able to prevent people from using crypto as an alternative to the existing monetary system.

Centralized stablecoins might see their demise in the long run if they're unable to comply with regulations from governments worldwide. But decentralized stablecoins will live longer because they're entirely governed by the Blockchain. Centralized stablecoin issuers are the ones that need to be worried as they could face fines from the government. The average person can simply switch to another centralized or even decentralized stablecoin if one of them fails. While the demise of centralized stablecoins could affect the crypto market in the short term, decentralized ones might take the lead in recovering the same at its fullest. Just my thoughts

[tippytoes]

It doesn´t mean anything until it happens, we read news almost everyday that crypto should be banned, regulated, but the reality? Nobody cares, I am here for pretty long time and I don´t see anything what goverments have done against cryptocurrencies.  

Exactly. At least, the heavy regulation or ban of stablecoins is just a proposal by central banks worldwide. The final decision will lie in governments themselves. So far, it's been nothing but "talks" without concrete actions whatsoever. I believe that no one cares, since the crypto economy is still smaller than the global mainstream economy. Rest assured, that once crypto becomes a serious threat to the existence of Fiat, governments will do anything to try to stop it. While they may succeed in cracking down on exchanges, they'll never be able to prevent people from using crypto as an alternative to the existing monetary system.

Centralized stablecoins might see their demise in the long run if they're unable to comply with regulations from governments worldwide. But decentralized stablecoins will live longer because they're entirely governed by the Blockchain. Centralized stablecoin issuers are the ones that need to be worried as they could face fines from the government. The average person can simply switch to another centralized or even decentralized stablecoin if one of them fails. While the demise of centralized stablecoins could affect the crypto market in the short term, decentralized ones might take the lead in recovering the same at its fullest. Just my thoughts

That is so true. I don't think the government or banks can dictate the fate of those decentralized stablecoins. However, the lifespan of those centralized stablecoins will not easily vanished as they can't be ban easily. They need to undergo a lot of talks, hearings and discussions because a government can totally terminate its presence. And I don't think that will happen very easily. They might end up utilizing stablecoins once they fully understand the benefits of using stablecoins.

[TheUltraElite]

It doesn´t mean anything until it happens, we read news almost everyday that crypto should be banned, regulated, but the reality? Nobody cares, I am here for pretty long time and I don´t see anything what goverments have done against cryptocurrencies.

Exactly, the government has got other things to worry about and cryptocurrency is the least of them. Moreover they are aware of things going around with crypto, they are no fools running a country even if many people think that way.

Fact that so many casinos are running on crypto and government does not do anything to stop them means that they are not willing to crackdown on them. The people who are actually getting punished are the money laundering cases.

For stablecoins, I dont see anything good except that they can be a good intermediary position while trading. Like when you sell Coin1 (hypotheical) for USDT, you get some USDT, but your target is another coin, say Coin2 but since you sold Coin1 at bull market, Coin2's price is high and so just hold USDT for now and buy Coin2 when bear market starts. That way you gain a multiplied amount of Coin2 than if you would have bought just after selling Coin1.

[Ridwan Fauzi]

I don't know why central banks wants to ban stable cryptocurrency, but if it is true, then it will be bad.
Many traders and investors in crypto using stable coin like USDT to convert their fiat into crypto which make they easy to manage their money.

They will make their own crypto currency as a solution. They know they ban stable coin didn't give any profit for them.

Take a look to Chinese governement who create remindi based on blockchain system, their intention is to ban stable coin like USDT, TUSD and etc that being used by their citizen.

It will be different when reminbi has been using by their citizen. The governement will try to get punished for their citizen who using it. And it will make their money fiat will be used by most people in this world.

[Anonylz]

Even if at all they are able to ban stable coin which am still wondering how they are going to succeed in that aspect,  people will result in using fiat most, stable coin are some how playing the role of fiat in a digital way, and since almost all crypto users prefer to use stable coin I guess the government are not happy about it, still looking for a way to inflict pain on crypto since they can't outright ban it, and knowing the importance of it to crypto community it becomes their point of target.

[jessyj48]

I will wait and watch how this is going to be possible for the government, something decentralized can't be controlled by other power organizations, is this not one of the reasons why government hates Bitcoin and privacy coins till date?