Which Stablecoin is the most Trustworthy?

[very_452001]

Lets say for example that the auditors/regulators has found that USDT Tether has printed tokens out of thin air that are not backed by the fiat $dollars, from there what will happen to USDT on the basis of this news?:

- Is it possible for a stablecoin to crash to 0?

- Will centralised exchanges start delisting USDT in light of this news?

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

- Will all decentralised projects smart contracts that used USDT in them be automatically cancelled/void?

For beginners the word Stablecoin sound stable 'no risks'.

What's the best decentralized stablecoin out there where you can earn interest on or stake it?

Otherwise which centralized stablecoin is backed by FDIC or SIPC protection policies?

[jackg]

Well yeah if its not fully backed then a stablecoin could drop to zero.

Most cexes have been pushing its usage so much that they'll probably cover it imo if it falls. (coinbase have been pushing usdc but I think binance would be able to cover it and return the $ equivelant). .

I'd trust dai or usdc at the moment if I had to pick. I haven't seen much that's fully insured much though atm and maybe someone ought to make one and run it like an insurance firm.

[TryNinja]

- Is it possible for a stablecoin to crash to 0?

Everything is possible.

- Will centralised exchanges start delisting USDT in light of this news?

They will most likely do that and freeze withdrawals (and maybe trades).

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

What happens if you own something that is now worthless?

- Will all decentralised projects smart contracts that used USDT in them be automatically cancelled/void?

No. But some of them may collapse. And many people will most likely get burned in the process. Quite a few DeFis (e.g lending dapps like AAVE and Compound) let you use USDT and other stablecoins as collateral for borrowing other coins/stablecoins.

For beginners the word Stablecoin sound stable 'no risks'.

Stable only means its price isn't varying constantly. What happens if everyone finds out that your dollars aren't actually worth any dollar?

I'd trust dai or usdc at the moment if I had to pick.

DAI is also partially backed by USDT and multiple coins (which would most likely drop hard if Tether is confirmed a fraud). Good luck with that.

At least USDC is backed by Coinbase and chances are that they (may) give you 1:1 on your USDC even if the ecossystem collapses.

[very_452001]

Well yeah if its not fully backed then a stablecoin could drop to zero.

Most cexes have been pushing its usage so much that they'll probably cover it imo if it falls. (coinbase have been pushing usdc but I think binance would be able to cover it and return the $ equivelant). .

I'd trust dai or usdc at the moment if I had to pick. I haven't seen much that's fully insured much though atm and maybe someone ought to make one and run it like an insurance firm.

Okay then, centralised exchanges are the owners of these stablecoins, like Bitfinex owns USDT and Coinbase owns USDC? So if a stablecoin fails then the exchange that issued their stablecoin should fail and collapse too correct?

I see Gemini issued their stablecoin GUSD.

So are we looking at all exchanges issuing their stablecoins and the exchange could break down collapse if their stablecoin fails like a double risk right?

- Is it possible for a stablecoin to crash to 0?

Everything is possible.

- Will centralised exchanges start delisting USDT in light of this news?

They will most likely do that and freeze withdrawals (and maybe trades).

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

What happens if you own something that is now worthless?

- Will all decentralised projects smart contracts that used USDT in them be automatically cancelled/void?

No. But some of them may collapse. And many people will most likely get burned in the process. Quite a few DeFis (e.g lending dapps like AAVE and Compound) let you use USDT and other stablecoins as collateral for borrowing other coins/stablecoins.

For beginners the word Stablecoin sound stable 'no risks'.

Stable only means its price isn't varying constantly. What happens if everyone finds out that your dollars aren't actually worth any dollar?

I'd trust dai or usdc at the moment if I had to pick.

DAI is also partially backed by USDT and multiple coins (which would most likely drop hard if Tether is confirmed a fraud). Good luck with that.

At least USDC is backed by Coinbase and chances are that they (may) give you 1:1 on your USDC even if the ecossystem collapses.

Isn't DAI stablecoin decentralized?

Okay you say USDC is the most trustworthy?

Lastly can central banks digital currencies CBDC's make stablecoins obsolete?

[moderator's note: consecutive posts merged]

[jackg]

Okay then, centralised exchanges are the owners of these stablecoins, like Bitfinex owns USDT and Coinbase owns USDC? So if a stablecoin fails then the exchange that issued their stablecoin should fail and collapse too correct?

I see Gemini issued their stablecoin GUSD.

So are we looking at all exchanges issuing their stablecoins and the exchange could break down collapse if their stablecoin fails like a double risk right?

You mean like when bitfinex got hacked, lost 33% of all user funds and disappeared...

So the answer is a no to that one. If a coin did drop the exchange might find a way to try to buy back user trust (for example giving tokens or paying in another exchanges token when one falls). But ultimately they'll probably find every reason not to go bankrupt or even lose customers. Your old user base goes in an innovative field? Just wait for more to come through and those who lost everything to be distracted focusing on how they're going to get any money....

[TryNinja]

Isn't DAI stablecoin decentralized?

Yes, but why would that change anything I said? DAI is 100% collaterized by other assets, including centralized ones (USDT, even though it's just a little). And most coins would crash with it, so chances are that DAI would probably become partialy insolvent.

Okay you say USDC is the most trustworthy?

IMO, yes. USDC, GUSD and PAX (not in this particularly order).

Lastly can central banks digital currencies CBDC's make stablecoins obsolete?

I doubt. Can you put a central bank CBDC on the ETH blockchain?

[very_452001]

Isn't DAI stablecoin decentralized?

Yes, but why would that change anything I said? DAI is 100% collaterized by other assets, including centralized ones (USDT, even though it's just a little). And most coins would crash with it, so chances are that DAI would probably become partialy insolvent.

Okay you say USDC is the most trustworthy?

IMO, yes. USDC, GUSD and PAX (not in this particularly order).

Lastly can central banks digital currencies CBDC's make stablecoins obsolete?

I doubt. Can you put a central bank CBDC on the ETH blockchain?

They could code it to make their CBDC compatible with the ETH blockchain, possible?

Otherwise we will have 2 systems running in parallel that is decentralised crypto like btc, eth and government/central bank CBDC's and governments want their system for everyone and declare war on our current decentralized system.

[FIFA worldcup]

Lets say for example that the auditors/regulators has found that USDT Tether has printed tokens out of thin air that are not backed by the fiat $dollars, from there what will happen to USDT on the basis of this news?:

- Is it possible for a stablecoin to crash to 0?

- Will centralised exchanges start delisting USDT in light of this news?

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

- Will all decentralised projects smart contracts that used USDT in them be automatically cancelled/void?

For beginners the word Stablecoin sound stable 'no risks'.

What's the best decentralized stablecoin out there where you can earn interest on or stake it?

Otherwise which centralized stablecoin is backed by FDIC or SIPC protection policies?

If this happens, it will not be good for all stable coins and crypto itself. People will lose trust on the market and we can see a big dump in the market where people selling off their stable coins to the fiat. Among all the stable coins USDC is the one which is more regulated but it is also not 100% backed by dollar.

[pooya87]

All of what you are asking are affected by one thing: centralization of the cryptocurrency itself.
That is the single point of failure and the characteristic of any centralized altcoin such as these stablecoins is that they can easily be shut down and their value can drop to zero instantly. For example in case some government decided to shut down the company that controls this coin the coin itself would shut down also. That also affects any tokens it has in any other centralized platform such as the smart contract tokens on ETH.

This is why no centralized altcoin has ever been considered "trustworthy" but only "convenient" to use.

[PrimeNumber7]

Lets say for example that the auditors/regulators has found that USDT Tether has printed tokens out of thin air that are not backed by the fiat $dollars, from there what will happen to USDT on the basis of this news?:

This is very unlikely. There has been multiple smear campaigns against bitfinex and tether going on for years. These smear campaigns have resulted in multiple 'runs' on USDT, and to my knowledge, tether has always been able to redeem USDT for dollars.

If what you say were to happen, confidence in the bitcoin and crypto ecosystem would collapse, we would see a crash in the value of all types of coin, and people rushing to get their money back into the fiat ecosystem.

There is not anything preventing any stablecoin from falling to any price, including zero, however sellers will probably not be willing to accept a price far below $1 because stablecoins can be redeemed by their issuers at face value after meeting certain restrictions (such as KYC, and minimum amounts). There are also people willing to arb stablecoins by buying them for less than $1 on an exchange and redeeming them with their issuers.

[Taskford]

Lets say for example that the auditors/regulators has found that USDT Tether has printed tokens out of thin air that are not backed by the fiat $dollars, from there what will happen to USDT on the basis of this news?:

- Is it possible for a stablecoin to crash to 0?

- Will centralised exchanges start delisting USDT in light of this news?

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

- Will all decentralised projects smart contracts that used USDT in them be automatically cancelled/void?

For beginners the word Stablecoin sound stable 'no risks'.

What's the best decentralized stablecoin out there where you can earn interest on or stake it?

Otherwise which centralized stablecoin is backed by FDIC or SIPC protection policies?

USDT got the big volume now among those stable coins but we cannot say that we can trust them to the extent that we will hold it for many years since there are possibilities that it will drop in future but for now if you are looking for good stable coin then you can grab that option.  Also BUSD is good option so it's up to you now on which of them will you choose.

[Lucius]

The only correct question I would ask anyone who wonders if stablecoins are something trustworthy is to ask themselves if they believe in what actually back them. Often this is actually one big nothing, and digital printing of stablecoin is actually equal to printing fiat money which has reached incredible proportions these days.

But there is one very important difference between having $100 in your wallet and the same amount in stablecoin - this digital version of the coin can be frozen at any time, even if you keep it in a non-custodial wallet. I will say without a doubt that stablecoins are something far more dangerous than fiat and any cryptocurrency - but most people are not really aware of it at all.

@mk4 made a good review on this topic -> Most Stablecoins Can Be Frozen, Even in Your Own Wallets

[RabbiTANK]

Trust? None actually but what if something happens? Which one would be easier to trace or hunt down by the law or SEC? That's centralized stable coins I believe, for a stable coin to even operates with peace of mind the project must be regulated, this is why I prefer stable coins like USDT

[cryptoaddictchie]

Actually none mate. But among stablecoin Id keeping I always used BUSD on Binance as I know CZ cared for those breached and hacked so they will definitely make their security more secure and safe. I heard as well that they have insurance thats why he always say funds are $safu. Anyway just na opinion. But I do have some other stablecoin too. Among it usdt is most untrustworthy as they have some issues before and maybe have one again with sec that needs clarification.

[disconnectme]

In all sense none of these Stablecoins is 100% safe proof but the one I will say still most trustworthy is DAI and I expect the demand to keep growing in this bull market, the problem with other Stablecoins is that they are centralised and can be default in paying you because they want to, for me you can't do that with DAI or there is no precedence so far and I hope it remain this way

[mlmdaily]

All popular of them are Trustworthy enough, just ignore this pointless fud

[tvplus006]

...So are we looking at all exchanges issuing their stablecoins and the exchange could break down collapse if their stablecoin fails like a double risk right?

In such cases, it is necessary to use decentralized stablecoins, such as DAI. In the near future, another new decentralized stablecoin is expected, which was announced on Twitter by Justin Sun, supported by TRX and BTT. https://twitter.com/justinsuntron/status/1217876471483514880 However the name for this stablecoin has not yet been invented)

[hd49728]

- Is it possible for a stablecoin to crash to 0?

Would not fall or crash to 0 but I would wait for drama on stable coins as many of the coins were minted from thin air. You can assume some of them or their amount were pegged with US dollars or gold or any asset but not all of stable coin amount on the market are backed by the same amount of fiat or gold.

If crash happens, it won't bring the price down to 0.

- Will centralised exchanges start delisting USDT in light of this news?

It will be a shock for the crypto market if USDT has a terrible drama like that. Delist will be thing too late after drama but price of USDT will crash before delisting new.

- What will happen to all of the USDT tokens in the millions of user wallets, become worthless?

They can be frozen by governments

[very_452001]

The only correct question I would ask anyone who wonders if stablecoins are something trustworthy is to ask themselves if they believe in what actually back them. Often this is actually one big nothing, and digital printing of stablecoin is actually equal to printing fiat money which has reached incredible proportions these days.

But there is one very important difference between having $100 in your wallet and the same amount in stablecoin - this digital version of the coin can be frozen at any time, even if you keep it in a non-custodial wallet. I will say without a doubt that stablecoins are something far more dangerous than fiat and any cryptocurrency - but most people are not really aware of it at all.

@mk4 made a good review on this topic -> Most Stablecoins Can Be Frozen, Even in Your Own Wallets

I see in that link you provided that Dai cant be frozen. Is this still the case and can you confirm Dai is decentralized?

[Shasha80]

To be honest, there is no stable coins that is 100% safe, many bad things can happen to stable coins. But if we are too scared and dare not take risks,
we will get nothing. In my opinion, of all the stable coins currently circulating, only USDT is the most trusted. I said that because I saw that the demand
for USDT was very high compared to other stable coins. In fact, USDT has long been in the top 3 on coinmarketcap sites, even the volume of USDT
exceeds the volume of Bitcoin. It was enough for me to trust USDT.