Which Stablecoin is the most Trustworthy?

[TryNinja]

But isn't Binance under investigation now ?

By whom? And it doesn't matter, BUSD is backed/controlled by Paxos and not Binance.

Even Dai not backed up to?

DAI is backed by cryptocurrencies through a smartcontract (see MakerDAO).

[fullhdpixel]

Okay if USDT Tether collapses under its scandal then can it bring down USDC and Dai coins too?

It will impact them a lot, that's the least I can say. Since all the 3 coins you named are different and not interconnected to each other in any way, so I don't think if one coin scams or anything like that happens it would crash another coin. If USDT collapses then there will be a certain level of distrust and that is what will impact these other stable coins but that would be for some time only. Once the market settles down, there will be a lot of traffic on these other stable coins specially DAI since it's decentralized and people would feel much more secure going with a decentralized stable coin.

I don't think USDT would ever collapse though because they have the biggest volume in terms of trading and they are sitting very solidly in the market so I see no reason why the coin would suddenly collapse unless there is something wrong.

[verita1]

To think that USDT could collapse would be a disaster. Although I think it could not happen because for a reason it is the most used stable coin in the market.

Here is an interesting thread by Caitlin Long, the founder and CEO of Avanti Financial group that alleviates concerns that may arise from the fact that Tether is a stablecoin is not backed 1: 1 by USD and that the most recent events it has suffered bitcoin could lead to further complications.

I particularly liked this argument:

10 / Plus, if #Tether stays a de facto credit hedge fund by investing reserves this way, markets now can safely predict that #bitcoin & #crypto prices will likely exhibit high correlation w / credit markets. They will probably correct together.

https://twitter.com/CaitlinLong_/status/1393651168681676801?s=20

[Farma]

when I spend a lot of my time trading on the Binance exchange I use BUSD more than USDT. but when I trade on other exchanges with the tokens I have, I will use more USDT. and I also won't forget to use USDT TRC to make withdrawals to get cheaper fees than I have to use the ERC network.

looks like quite a lot of people are using BUSD, maybe because it is under binance. So far, I'm still using USDT. well, I don't trust USDT, but I use it because I'm used to it, and given that USDT is the largest stable of the coins, so I think it's quite safe to use in the short term.

[Godwinpaul]

I use binance USD and USDT in most cases, but I've come to realise that most people would rather go for USDT than BUSD. USDT has been in the market for a long time despite the allegations by SEC. The token has the support of several blockchain such as tron, ethereum, binance smart chain etc.

[bitzizzix]

when I spend a lot of my time trading on the Binance exchange I use BUSD more than USDT. but when I trade on other exchanges with the tokens I have, I will use more USDT. and I also won't forget to use USDT TRC to make withdrawals to get cheaper fees than I have to use the ERC network.

looks like quite a lot of people are using BUSD, maybe because it is under binance. So far, I'm still using USDT. well, I don't trust USDT, but I use it because I'm used to it, and given that USDT is the largest stable of the coins, so I think it's quite safe to use in the short term.

Yes, maybe because BUSD is a useful and stable alternative coin like USDT and but USDT is much better and most people use it and have the largest trading volume on all exchanges and I still use it too.
and as an alternative if the price of Bitcoin or other crypto asset drops suddenly, you can quickly exchange it for USDT as it is today.

[very_452001]

I use binance USD and USDT in most cases, but I've come to realise that most people would rather go for USDT than BUSD. USDT has been in the market for a long time despite the allegations by SEC. The token has the support of several blockchain such as tron, ethereum, binance smart chain etc.

Lets say for example that Tether USDT has been found guilty by the judge in a court room in the US or China decides to go after Bitfinex exchange that owns tether and bans Tether on exchanges, pressuring the exchanges to delist tether USDT because they have been legally been convicted in court of printing tether coins out of thin air, not backed by cash $dollars.

Wont this cause a run on Tether USDT where USDT holders will want to cash out their tether for their local fiat currencies? Also wont this cause USDT trading pairs with cryptos to be wiped off exchanges for example there wont be USDT/BTC or USDT/ETH pairs anymore because no seller wants USDT for their BTC etc?

When you say USDT has support from other blockchains such as Tron, Ethereum, BSC, then how do these chains support tether if a judge in a court room finds tether guilty?

But isn't Binance under investigation now ?

By whom? And it doesn't matter, BUSD is backed/controlled by Paxos and not Binance.

Even Dai not backed up to?

DAI is backed by cryptocurrencies through a smartcontract (see MakerDAO).

Why is Binance using a 3rd party Paxos for their BUSD stablecoin? If Binance can create Binance smart chain BSC and BNB and all those other financial derivatives on their own Binance platform they why cant they create they own stablecoin managed by themselves 

Just to confirm for Dai to collapse then either Ethereum or MakerDAO must collapse 1st or their smart contract ecosystems has vulnerabilities causing a collapse? When I say collapse I mean the blockchain collapsing not the price meaning if Eth or MAkerDAO loses 99% in a bear market then Dai will still be okay?

[moderator's note: consecutive posts merged]

[Atang Sulaeman]

USDT which is an amount comparable to fiat money which is solidified like it will be safe, unless fiat money is added to make it back or add to circulation in crypto it could, and will not possibly fall to 0, because many people hold it and believe it to be stable coin.

[very_452001]

Okay if USDT Tether collapses under its scandal then can it bring down USDC and Dai coins too?

It will impact them a lot, that's the least I can say. Since all the 3 coins you named are different and not interconnected to each other in any way, so I don't think if one coin scams or anything like that happens it would crash another coin. If USDT collapses then there will be a certain level of distrust and that is what will impact these other stable coins but that would be for some time only. Once the market settles down, there will be a lot of traffic on these other stable coins specially DAI since it's decentralized and people would feel much more secure going with a decentralized stable coin.

I don't think USDT would ever collapse though because they have the biggest volume in terms of trading and they are sitting very solidly in the market so I see no reason why the coin would suddenly collapse unless there is something wrong.

When you say 'Impact', what do you mean by that term? Do you mean impact the stablecoin market in price like for example instead of $1 USDC and Dai can drop like 50% to 50cents each?

However isnt a stablecoin suppose to be 'Stable at $1' in any market condition hence they are called stablecoins in the 1st place?

If I assume you mean impacting the price then its not a stablecoin because price is not stable right?

USDT which is an amount comparable to fiat money which is solidified like it will be safe, unless fiat money is added to make it back or add to circulation in crypto it could, and will not possibly fall to 0, because many people hold it and believe it to be stable coin.

So you saying the whole USDT stablecoin is backed by trust from its holders? So as long there's trust it will still be stable at $1 even though a judge in a courtroom finds USDT Teher guilty? Wil exchanges still trust USDT and not delist it even though they will face legal enforcement from authorities to delist it?


[moderator's note: consecutive posts merged]

[TryNinja]

Why is Binance using a 3rd party Paxos for their BUSD stablecoin? If Binance can create Binance smart chain BSC and BNB and all those other financial derivatives on their own Binance platform they why cant they create they own stablecoin managed by themselves  

Because that's not what matters. The important thing is NOT the token, but what and who backs it.

It doesn't matter if they "own" Binance Smart Chain or Binance Chain. They could have also created BUSD themselves on the ETH network, after all, anyone can deploy a smart contract (an ERC20 token in this case).

They are using Paxos because: they are trusted, their business model is about stablecoins, they can handle the audits, the backing, the bank accounts, etc... why do everything themselves when there are companies which can do a better job?

Just to confirm for Dai to collapse then either Ethereum or MakerDAO must collapse 1st or their smart contract ecosystems has vulnerabilities causing a collapse? When I say collapse I mean the blockchain collapsing not the price meaning if Eth or MAkerDAO loses 99% in a bear market then Dai will still be okay?

For every 1 DAI in circulation, there is $1 worth of ETH or other crypto backing it, all managed by a smart contract and the liquidators. If ETH suddenly goes to $0, your 1 DAI is suddenly backed by... nothing. Or better, some ETH worth $0.

The same way, if their smart contract is hacked and the ETH is drained, your DAI is worth nothing because the collateral/backing is gone.

When you say 'Impact', what do you mean by that term? Do you mean impact the stablecoin market in price like for example instead of $1 USDC and Dai can drop like 50% to 50cents each?

The only reason USDC would be worth less than $1 is if they are not backed. Period. Even if the market suddenly panic sells everything and USDC goes to $0.50 on the exchanges, you could buy them for $0.50 and redeem for $1 on Coinbase.

So you saying the whole USDT stablecoin is backed by trust from its holders? So as long there's trust it will still be stable at $1 even though a judge in a courtroom finds USDT Teher guilty? Wil exchanges still trust USDT and not delist it even though they will face legal enforcement from authorities to delist it?

In the free market, people pay what they think something is worth. If everyone thinks USDT is backed and worth $1, then people will buy when it goes lower, which keeps the price stable. But if USDT is found to be unbacked, most will panic sell and people will not buy, making the price to tank. And if you can't redeem each one of your USDT for $1, then it's worthless.

[very_452001]

Why is Binance using a 3rd party Paxos for their BUSD stablecoin? If Binance can create Binance smart chain BSC and BNB and all those other financial derivatives on their own Binance platform they why cant they create they own stablecoin managed by themselves  

Because that's not what matters. The important thing is NOT the token, but what and who backs it.

It doesn't matter if they "own" Binance Smart Chain or Binance Chain. They could have also created BUSD themselves on the ETH network, after all, anyone can deploy a smart contract (a ERC20 token in this case).

They are using Paxos because: they are trusted, their business model is about stablecoins, they can handle the audits, the backing, the bank accounts, etc... why do everything themselves when there are companies which can do a better job?

Just to confirm for Dai to collapse then either Ethereum or MakerDAO must collapse 1st or their smart contract ecosystems has vulnerabilities causing a collapse? When I say collapse I mean the blockchain collapsing not the price meaning if Eth or MAkerDAO loses 99% in a bear market then Dai will still be okay?

For every 1 DAI in circulation, there is $1 worth of ETH or other crypto backing it, all managed by a smart contract and the liquidators. If ETH suddenly goes to $0, your 1 DAI is suddenly backed by... nothing. Or better, some ETH worth $0.

The same way, if their smart contract is hacked and the ETH is drained, your DAI is worth nothing because the collateral/backing is gone.

When you say 'Impact', what do you mean by that term? Do you mean impact the stablecoin market in price like for example instead of $1 USDC and Dai can drop like 50% to 50cents each?

The only reason USDC would be worth less than $1 is if they are not backed. Period. Even if the market suddenly panic sells everything and USDC goes to $0.50 on the exchanges, you could buy them for $0.50 and redeem for $1 on Coinbase.

Okay so Paxos is responsible for BUSD however is Paxos a US company that offers any FDIC or SIPC protection policies like banks do if anything happens to BUSD?

[TryNinja]

Okay so Paxos is responsible for BUSD however is Paxos a US company that offers any FDIC or SIPC protection policies like banks do if anything happens to BUSD?

See: https://www.paxos.com/paxos-standard-terms-conditions/

Paxos Trust Company, LLC provides cash management for the US dollar deposits backing the USD Stablecoins so that each USD Stablecoin is backed by an equivalent amount of US dollar deposits or Debt Instruments. To achieve this, the US dollar deposits backing the USD Stablecoins are held in custody only in one or more of the following forms: (i) fiat currency held in FDIC-insured bank accounts; (ii) (a) direct investments (including through repurchase agreements) in debt instruments that are expressly guaranteed by the full faith and credit of the United States Government; and/or (b) money-market funds composed of such debt instruments; and (iii) fiat currency held at FDIC-insured banks in excess of FDIC-insured limits, only to the extent that Paxos in its reasonable discretion believes that such funds need to remain liquid and readily available to service customers and that option 5.1.ii. is therefore impracticable. Paxos Trust Company may modify its cash management program from time to time, provided that the US dollars will always be held in segregated accounts in one of the three forms described above.

[very_452001]

Okay so Paxos is responsible for BUSD however is Paxos a US company that offers any FDIC or SIPC protection policies like banks do if anything happens to BUSD?

See: https://www.paxos.com/paxos-standard-terms-conditions/

Paxos Trust Company, LLC provides cash management for the US dollar deposits backing the USD Stablecoins so that each USD Stablecoin is backed by an equivalent amount of US dollar deposits or Debt Instruments. To achieve this, the US dollar deposits backing the USD Stablecoins are held in custody only in one or more of the following forms: (i) fiat currency held in FDIC-insured bank accounts; (ii) (a) direct investments (including through repurchase agreements) in debt instruments that are expressly guaranteed by the full faith and credit of the United States Government; and/or (b) money-market funds composed of such debt instruments; and (iii) fiat currency held at FDIC-insured banks in excess of FDIC-insured limits, only to the extent that Paxos in its reasonable discretion believes that such funds need to remain liquid and readily available to service customers and that option 5.1.ii. is therefore impracticable. Paxos Trust Company may modify its cash management program from time to time, provided that the US dollars will always be held in segregated accounts in one of the three forms described above.

Is USDC a stablecoin managed by Coinbase themselves? If USDC collapses then wont that collapse the COIN stock share price of Coinbase in the stock market resulting in game over for Coinbase?

If a stablecoin goes to 50cents then its not a stablecoin, it becomes an 'altcoin'. Stablecoin means stable at $1 no matter how bad the market conditions are.

[TryNinja]

Is USDC a stablecoin managed by Coinbase themselves? If USDC collapses then wont that collapse the COIN stock share price of Coinbase in the stock market resulting in game over for Coinbase?

USDC is managed by Circle.

If a stablecoin goes to 50cents then its not a stablecoin, it becomes an 'altcoin'. Stablecoin means stable at $1 no matter how bad the market conditions are.

A traditional stablecoin's job is to be minted and redeemed by $1, which is why the market keeps it around $1. You just can NOT guarantee the $1 price because there is a free market, where people buy and people sell all the time. If someone has $1b USDC and market sells it on an exchange, the price will fill all bids and it will drop a lot. But it will most likely go back around $1 because others can arbitrage by buying and redeeming for $1 through Coinbase.

[carrie_white]

The most trusted and best stablecoin in my opinion is USDT, because USDT is the first stablecoin that appears, and has been integrated with almost all other altcoins, I have never had a problem with USDT, so USDT is certainly very safe

[PrimeNumber7]

USDT which is an amount comparable to fiat money which is solidified like it will be safe, unless fiat money is added to make it back or add to circulation in crypto it could, and will not possibly fall to 0, because many people hold it and believe it to be stable coin.

So you saying the whole USDT stablecoin is backed by trust from its holders? So as long there's trust it will still be stable at $1 even though a judge in a courtroom finds USDT Teher guilty? Wil exchanges still trust USDT and not delist it even though they will face legal enforcement from authorities to delist it?

USDT is backed by dollars, dollar-like (such as bank accounts denominated in dollars, treasury notes), and others assets. There is currently approximately $162 million in assets held by tether's USDT accounts in excess of issued tethers.

There is some trust involved that tether will continue to redeem tethers for $1. This is true for all stablecoins.

When you say 'Impact', what do you mean by that term? Do you mean impact the stablecoin market in price like for example instead of $1 USDC and Dai can drop like 50% to 50cents each?

The only reason USDC would be worth less than $1 is if they are not backed. Period. Even if the market suddenly panic sells everything and USDC goes to $0.50 on the exchanges, you could buy them for $0.50 and redeem for $1 on Coinbase.

This is why USDC will not trade substantially below or above $1. The friction to exchange dollars <--> USDC is very low. The friction to move dollars into/out of coinbase is also very low.

The above is also why USDT will generally not deviate from $1. There is a little bit more friction with USDT, but that is only because they market themselves to larger traders, while coinbase markets itself to retail investors.

[SquallLeonhart]

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?

To me BUSD Has always been the most trustworthy, it has always been a good one that provided me with a good amount of return, I would have to say that it will stay that way. Not because I trust binance so much but because I trust the other ones even less. USDT? That one is owned by a company called Tether in bahamas, do you really think that they are legit people? I mean if they were so legit they would be in a proper nation and not run away to bahamas. USDC? Or any other? All of them are a part of stablecoin group from very little known places or not even properly licensed places.

DAI is a good one because it is decentralized but I have seen too many hacking in the decentralized world right now to trust the code itself. So, that leaves BUSD which is owned by binance, there is no stablecoin that is managed by a bigger or more known or more trustworthy place in the world so that is why I picked it.

[very_452001]

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?

To me BUSD Has always been the most trustworthy, it has always been a good one that provided me with a good amount of return, I would have to say that it will stay that way. Not because I trust binance so much but because I trust the other ones even less. USDT? That one is owned by a company called Tether in bahamas, do you really think that they are legit people? I mean if they were so legit they would be in a proper nation and not run away to bahamas. USDC? Or any other? All of them are a part of stablecoin group from very little known places or not even properly licensed places.

DAI is a good one because it is decentralized but I have seen too many hacking in the decentralized world right now to trust the code itself. So, that leaves BUSD which is owned by binance, there is no stablecoin that is managed by a bigger or more known or more trustworthy place in the world so that is why I picked it.

Somebody said earlier that BUSD is backed by Paxos not Binance however I don't see any mention of BUSD on their wiki page:

https://en.wikipedia.org/wiki/Paxos_Trust_Company

[DarkDays]

The most trusted and best stablecoin in my opinion is USDT, because USDT is the first stablecoin that appears, and has been integrated with almost all other altcoins, I have never had a problem with USDT, so USDT is certainly very safe

To be frank, out of all stable coins USDT is the worst. Haven't you seen the news about how USDT is in a long term battle trying to (never actually getting round to it) to prove that USDT is backed by USD??? Here's a link to an article that puts this into perspective: https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b4d9

This makes USDT the most untrustworthy stable I ever know. If you do anything, do your best to stay away from USDT, any other stable would do.

[very_452001]

Is USDC a stablecoin managed by Coinbase themselves? If USDC collapses then wont that collapse the COIN stock share price of Coinbase in the stock market resulting in game over for Coinbase?

USDC is managed by Circle.

If a stablecoin goes to 50cents then its not a stablecoin, it becomes an 'altcoin'. Stablecoin means stable at $1 no matter how bad the market conditions are.

A traditional stablecoin's job is to be minted and redeemed by $1, which is why the market keeps it around $1. You just can NOT guarantee the $1 price because there is a free market, where people buy and people sell all the time. If someone has $1b USDC and market sells it on an exchange, the price will fill all bids and it will drop a lot. But it will most likely go back around $1 because others can arbitrage by buying and redeeming for $1 through Coinbase.

Okay lets say USDC is good and have audits to prove that they have $cash in the vaults to back up their USDC's that they printed all managed by Circle.

For example, Lets say from here Circle files for bankruptcy when its shareholders found out they cant pay off their debts from their balance sheet and the share price of this Circle company crashes. From this point will USDC be fine if Circle goes out of business, who manages USDC then? What if circle uses the cash reserves in the vaults that were originally there to back up USDC to pay off their debts, that means USDC is not backed by cash anymore? Finally how will Coinbase come to this rescue as Circle bad reputation can take down Coinbase too because of the USDC ties.

The most trusted and best stablecoin in my opinion is USDT, because USDT is the first stablecoin that appears, and has been integrated with almost all other altcoins, I have never had a problem with USDT, so USDT is certainly very safe

To be frank, out of all stable coins USDT is the worst. Haven't you seen the news about how USDT is in a long term battle trying to (never actually getting round to it) to prove that USDT is backed by USD??? Here's a link to an article that puts this into perspective: https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b4d9

This makes USDT the most untrustworthy stable I ever know. If you do anything, do your best to stay away from USDT, any other stable would do.

Yeah it makes sense for FUD against crypto like Bitcoin so whales can get bitcoins cheaper.

But FUD against stablecoins doesn't make sense because who wants to manipulate a stablecoin market for profit  Stablecoins don't get cheaper in any market condition so yeah that FT article is not FUD I guess.

[moderator's note: consecutive posts merged]