Stablecoins can be frozen on the ETH blockchain

[Abiky]

I've stumbled on a news article from CoinTelegraph which said that Centre has frozen (blacklisted) USDC stablecoin holdings from an ETH address. There has been a similar situation with the stablecoin "Tether USDT" over the past days. I know that stablecoins hold good promise in bringing the best of both worlds. But freezing someone's assets on-chain, makes stablecoin issuers no different than traditional banks we've been accustomed for a very long time.

For those unaware about the situation, here's a link to the CoinTelegraph article: https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc. It the trend continues, I don't think people will fully embrace stablecoins altogether. Stablecoin issuers might become easily manipulated by governments and central banks in order to freeze accounts at will. So much for decentralization on ERC-20 tokens living on the ETH blockchain.

What are your thoughts?

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[bitkanu]

I can't comment a lot about this consider any blocked address will always be related to the crime

n the comment section of a different address, a user claims the owner of the blacklisted address stole other tokens from them

that's from your link and I guess that has become the main point why this ability has already created by the issuer of stable coin.

[Yogee]

I've stumbled on a news article from CoinTelegraph which said that Centre has frozen (blacklisted) USDC stablecoin holdings from an ETH address. There has been a similar situation with the stablecoin "Tether USDT" over the past days. I know that stablecoins hold good promise in bringing the best of both worlds. But freezing someone's assets on-chain, makes stablecoin issuers no different than traditional banks we've been accustomed for a very long time.

For those unaware about the situation, here's a link to the CoinTelegraph article: https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc.

It the trend continues, I don't think people will fully embrace stablecoins altogether. Stablecoin issuers might become easily manipulated by governments and central banks in order to freeze accounts at will. So much for decentralization on ERC-20 tokens living on the ETH blockchain.

What are your thoughts?

What's funny here is a lot of people don't give a shit anymore whether a stable coin is centralized or not because majority are accustomed to using centralized services from exchanges to wallets and to other services involving cryptocurrencies. One common excuse I read why they still support USDT or USDC is they only use it for trading purposes that's why they aren't worried if it can be frozen.

As crypto goes mainstream, it seems more and more people slowly accepts centralized stable coins. But there's still hope for the few who value decentralization. Out of all the existing stable coins running on the ethereum blockchain, only DAI can't be frozen. mk4 has written a good post about this topic and you can read it here https://bitcointalk.org/index.php?topic=5204055.0
 

[bgaf]

This is not good in my opinion. What if an investor who has a huge fund then suddenly been hold or freeze on an exchange? That is quite frustrating especially he knows he is not doing any kind of illegal activity. Centralized exchange can do locking of accounts, but they should have a valid point to do this.

Stablecoins are the backboned of market and most people uses it for safe haven of their trades. This will make trader doubtful to even use it for safety.

[Greatdev]

Your money won't get freezed using stable coins like USDC or USDT unless you are from a criminal empire, I don't need to worry about this OP, im into clean and straight path of making money and I like the fact that stablecoins can get freezed

[Yogee]

Your money won't get freezed using stable coins like USDC or USDT unless you are from a criminal empire, I don't need to worry about this OP, im into clean and straight path of making money and I like the fact that stablecoins can get freezed

They can freeze your money even if you are not doing criminal activities. Why? Simply because they have the power to do so.

This is crazy. Why would you even want to have stablecoins to be frozen? With your reasoning, why do you even use cryptocurrency?

This further proves what I said earlier.

[akram143]

I've stumbled on a news article from CoinTelegraph which said that Centre has frozen (blacklisted) USDC stablecoin holdings from an ETH address. There has been a similar situation with the stablecoin "Tether USDT" over the past days. I know that stablecoins hold good promise in bringing the best of both worlds. But freezing someone's assets on-chain, makes stablecoin issuers no different than traditional banks we've been accustomed for a very long time.

For those unaware about the situation, here's a link to the CoinTelegraph article: https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc. It the trend continues, I don't think people will fully embrace stablecoins altogether. Stablecoin issuers might become easily manipulated by governments and central banks in order to freeze accounts at will. So much for decentralization on ERC-20 tokens living on the ETH blockchain.

What are your thoughts?

As far as I know the the blockchain is decentralized but still ERC 20 tokens can't be considered as completely decentralized.Any stable coins are centralized as we know so it is possible for them to freeze coins even if we store them in our wallet means they can blacklist the address from the chainlink.

Centralized = we don't have complete control over the funds.

[pawanjain]

I've stumbled on a news article from CoinTelegraph which said that Centre has frozen (blacklisted) USDC stablecoin holdings from an ETH address. There has been a similar situation with the stablecoin "Tether USDT" over the past days. I know that stablecoins hold good promise in bringing the best of both worlds. But freezing someone's assets on-chain, makes stablecoin issuers no different than traditional banks we've been accustomed for a very long time.

For those unaware about the situation, here's a link to the CoinTelegraph article: https://cointelegraph.com/news/centre-freezes-ethereum-address-holding-100k-usdc. It the trend continues, I don't think people will fully embrace stablecoins altogether. Stablecoin issuers might become easily manipulated by governments and central banks in order to freeze accounts at will. So much for decentralization on ERC-20 tokens living on the ETH blockchain.

What are your thoughts?

The first thing to note here is to invest in those coins only where there is no centralization. Bitcoin is completely decentralized which means nobody has the ability to freeze your funds. If still people want to hold stable coins then they will have to know what they are getting into.
Yes, centralized cyptocurrencies can be regulated and the governments do have the ability to freeze your accounts just like how banks does.
Our motives to hold our desired cyrptocurrencies should be very clear and that is how we must decide in which coin to invest in.

[momchilandonov]

Thats why centralized projects are dangerous even in crypto space

[mindrust]

Eth + stable coins = new central banking

Nothing surprising.

And now it is not even fully regulated, semi legal, they can scam whoever they want.

[aemma]

This has now opened the eyes of everyone to the type of control in centralized stablecoins and as such will make everyone to be very careful of stablecoins and if not for unfavorable markets and/or volatility they can easily be abandoned. Also, this shows why it is not advisable holding stablecoins for a long time because anything can happen and the owner will be left stranded. Furthermore, I think it is now time for decentralized stablecoins to starting taking the lead because taking unnecessary risks with centralized stablecoins is not worth it. Lastly, we have now seen the importance of decentralization because, for a decentralized coin like Bitcoin such things cannot happen.

[Towerbreeze]

To all people who are against stable coins that are centralized please kindly provide a way to control illegal money funding and scam activities in crypto space because I don't see anything wrong in all the freezing, even binance still hunt some stolen funds by blacklisting hackers and scammers address

[qwizzie]

The ability of Tether to just blacklist wallet addresses at will (40 so far), makes it absolutely clear that this cryptocurrency is not decentralized and is not trustless of nature.
Link : https://hive.blog/hive-167922/@themarkymark/tether-freezes-7-9-million-usdt


Source : https://explore.duneanalytics.com/public/dashboards/3zhIaRUCFgmZMKqHG0pguvSvw1aOGL8gxFtZ2ujf

This goes against everything that cryptocurrency is in essence about : having full control over your own funds, through a decentralized blockchain.

[Abiky]

What's funny here is a lot of people don't give a shit anymore whether a stable coin is centralized or not because majority are accustomed to using centralized services from exchanges to wallets and to other services involving cryptocurrencies. One common excuse I read why they still support USDT or USDC is they only use it for trading purposes that's why they aren't worried if it can be frozen.

As crypto goes mainstream, it seems more and more people slowly accepts centralized stable coins. But there's still hope for the few who value decentralization. Out of all the existing stable coins running on the ethereum blockchain, only DAI can't be frozen. mk4 has written a good post about this topic and you can read it here https://bitcointalk.org/index.php?topic=5204055.0

Exactly. Most people don't care about centralization as long as they're able to make money in this emerging industry. It's rather disappointing since it greatly defeats the purpose of crypto/Blockchain technology. Centralized stablecoins bring back traditional banking into the crypto space. It's like "Banking, reimagined". I'm guessing that governments and central banks might choose to issue their own digital currencies on public blockchains we know and love today, with the ability to manipulate them at will. Since ETH its a smart contract platform, anyone can design a token or coin with centralized features. The core Blockchain will still be decentralized, but the token itself won't. This will bring a clash between the decentralized and centralized realm.

Personally, I'd stay away from centralized stablecoins like USDC and USDT. DAI is the only decentralized stablecoin in the De-Fi space, bringing you complete control over your funds. With DAI, I can feel confident that my funds will always be there without being denied access to them. You can truly become your own bank with DAI, alongside De-Fi dApps that provide lending and borrowing services. While the rest of the people will use USDT because it's the biggest stablecoin on the market, DAI will still have its supporters. I'd wish that we had more decentralized options to choose from, in order to minimize risks as much as possible. It's only a matter of time before developers fork DAI into other decentralized stablecoins for the benefit of all. As time goes by, people will realize that centralized stablecoins can be frozen on the Blockchain. This might lead them towards DAI in the future. As long as DAI maintains its price of $1 USD per coin, there should be nothing to worry about.

Eth + stable coins = new central banking

Nothing surprising.

And now it is not even fully regulated, semi legal, they can scam whoever they want.

That's certainly true, mate. Effectively, ETH has become "Central Bank 2.0" due to the extreme manipulation of centralized assets. Stablecoin issuers now act as traditional banks, determining whenever a person should have access to his/her funds. There's the risk of stablecoin issuers pressing the "freeze" button whenever they want to. It greatly defeats the purpose of crypto/Blockchain technology. The saddest part of this is that most dApps are relying on USDC and USDT to provide De-Fi services. These types of centralized stablecoins should be effectively removed from Compound and other De-Fi protocols. DAI should be the only stablecoin to be used in ETH's De-Fi ecosystem. Otherwise, the De-Fi industry will be doomed. As long as no one cares about centralized stablecoins, they'll continue to grow in the crypto market at an unprecedented rate. Just my opinion

[pedpedped101]

To all people who are against stable coins that are centralized please kindly provide a way to control illegal money funding and scam activities in crypto space because I don't see anything wrong in all the freezing, even binance still hunt some stolen funds by blacklisting hackers and scammers address

Yes, that is that. If it is an illegal stablecoin and there are already obvious potential risks attached to I, then I see nothing wrong if it is frozen. Meanwhile, there are still so many of them that need to be stopped and not only ISDC. A coin whose developer is always making false claims need to be stopped. USDT is in line. If they are stopped, it will serve as a deterrent to others planning to issue theirs too.

[CuriousGeorge]

Your money won't get freezed using stable coins like USDC or USDT unless you are from a criminal empire, I don't need to worry about this OP, im into clean and straight path of making money and I like the fact that stablecoins can get freezed

They can freeze your money even if you are not doing criminal activities. Why? Simply because they have the power to do so.

This is crazy. Why would you even want to have stablecoins to be frozen? With your reasoning, why do you even use cryptocurrency?

This further proves what I said earlier.

You may cons with it but there should be another reason for that just like such ability can also be used to frozen the stolen amount. That can prevent the DAO to happen again.
There will always be pros and cons for that.

[serjent05]

Stablecoins are the backboned of market and most people uses it for safe haven of their trades.

Kinda disagree on this.  Market trades will continue even without stablecoins.  Besides, cryptocurrency market had been long functioning even before the creation of these stablecoin.

The ability of Tether to just blacklist wallet addresses at will (40 so far), makes it absolutely clear that this cryptocurrency is not decentralized and is not trustless of nature.

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This goes against everything that cryptocurrency is in essence about : having full control over your own funds, through a decentralized blockchain.

This is expected, cryptocurrency is created and programmed by people, they can always modify the codes to fit what they wanted on it.  This makes me worry about one day, all we knowned decentralized cryptocurrency will be tweaked to become centralized for the developer to be able to control the flow of transaction and this case with stablecoin is possibly the start of it.

[L A R A]

I think not only stablecoins, other tokens that are under the ETH network can also experience the same thing. ETH has a smart contract to arrange for a token to be sent or not, and not only that there are many other things.

[blue_hurricanger]

As long as the government has a good reason to freeze someone's assets on-chain, no matter stable coin or cryptos, I have no problem with that. Let be real, a lot of criminal activity abuse cryptos to carry out their works.

[Ryushin]

Stablecoin on eth blockchain can be freezed if the money isn't clean or it from any illegal activities, why would you have to worry about this if you aren't into any illegal stuffs? Also any address can be blacklisted or freeze, it doesn't have to be stable coins