Will governments destroy stablecoins in the long term?

[RealMalatesta]

I don't think this can happen with all stablecoins. Governments may ban the use of certain stablecoin because they broke the rules. At the moment governments have many control instruments and do not need to ban stablecoins.

On what kind of rules, you are referring to? Because this is not kind of exchange or casino where people register and maintain an account and may get clear themselves for all KYC procedures so that government will have positive stand against them. It is kind of open world, devs cannot be responsible for users behavior on committing any crime like money laundering or supporting terrorism/drugs. So, there is no rules are binding here for those stablecoin corporations secured.

It means in near future anything may happen. So, it is highly dangerous to make use of those centralized stablecoins. I read on this forum about decentralized stablecoin but not sure about its progress as of now.

[conected]

This should not be a threat to the government, precisely with the existence of stablecoins the government must be able to innovate by creating its own digital money and must be able to compete in order to make it easier for its users by charging cheaper transaction fees.  The existence of cryptocurrency is able to provide business opportunities, the government should not prohibit or destroy stablecoins instead the government must be able to provide strong support for it

- The government is looking for an opportunity in crypto but if they try to ditch the stablecoins in order to establish a new network of them, that doesn't seem to be the exact plan, even many investors will be averse to them when almost many people always exchange their bitcoin for stablecoins to keep value. Seriously, the destruction will not be reasonable, want to participate in here as a stablecoin, the government needs to create a friendly relationship and an easy environment, when they reach the attention of people, they will become owners of the stablecoin industry and other stablecoins will decrease in value.

[Don Pavilion]

Of course, I doubt about destroying stablecoins, but they will take measures for sure. They will impose taxes, introduce some prohibitions. Some countries may ban the whole thing in principle

[7788bitcoin]

I don't think governments have any interest in destroying stablecoins especially if they manage to earn a little bit on them (with taxes) i think they can coexist very well alongside fiat, they would be a great loss if they no longer exist are a great tool / help for traders to exit day trading at the end of the day

Why would the government allow these stable coins to coexist should be the question when they do not offer anything to the government and they will not wish to see a stable currency shining above their fiat counterpart. We will only have a clarity when the regulations are set in place and how each government will deal with these things and how they view stable currency and privacy based currency and i expect every government will have a different view point.

[noormcs5]

When governments discuss stable coins, Tether is not even mentioned. This gives you a clue about USDT and how much this token is given any serious attention.
Instead USDC seems to be gaining in favor or regulators. Anyway, I am not going to use any centralized stablecoin like those, and I am not supporting them. It would be better to hold any cryptocurrency instead of stable coins.

They were trying to create a law suite against USDT but they could not take any action. They tried to create a case where USDT is not fully backed by dollar but failed to proof.
As always, the government will try to destroy not only stable coins but also the overall crypto but they can't succeed.

[Abiky]

the US government will favour the use of stablecoin because it will still put USD as the reserve currency despite the crashing economy.
It's yet not clear how they could take advantage of the market but if one day the government-backed stablecoin will be one of the stablecoins used in crypto, it's going to be clear that they like it being part of the crypto ecosystem. the government can easily get tax from it.

Either governments use stablecoins for their own benefit or destroy them altogether. If governments are able to collect taxes from stablecoins, I don't see why they'd want to get rid of them in the first place. Stablecoins could benefit traditional Fiat currencies, as governments use them as "experimental grounds" for their own CBDCs. Some people believe that governments will use pre-existing stablecoins (instead of creating their own digital currencies from scratch) as the new standard of money in the future. Whenever that will become a reality or not, it's yet to be determined. If stablecoins were to live alongside CBDCs, they're going to have to "play by the rules". Otherwise, they'll fade into oblivion leaving people only with decentralized cryptocurrencies and traditional Fiat (via CBDCs).

Nonetheless, we cannot tell with certainty what will happen in the future. Regulations will play a huge role in determining stablecoins' prominence in the mainstream world. As long as stablecoin issuers comply with regulations, there should be nothing to worry about. With or without stablecoins, crypto/Blockchain tech will be here to stay for a very long time. Just my opinion

[hodap]

As stablecoins become more popular in the mainstream world, many are starting to wonder whenever governments will allow the industry to flourish or destroy it altogether. We've seen how interested central banks and mainstream governments are in launching digital currencies of their own. Something like a stablecoin would prove to be a huge threat to the existence of Fiat. I wouldn't put decentralized cryptocurrencies on this, because they're largely unstable. Only stablecoins pegged to the USD like Tether or USD Coin could pose a real threat to the financial sovereignty of Fiat currencies like the traditional US Dollar. Either governments use pre-existing stablecoins as their own, or create new ones from scratch (most likely situation) effectively putting an end to stablecoins' preeminence in the mainstream world.

What are your thoughts?

I agree with what others said here that if they wanted to destroy stable coins they would have acted already. On the other hand they may be aware that there can also be decentralized solutions, possibly anonymous solutions. If you were a government, what would you prefer? A centralized stable coin that you can scrutinize whenever you want or drive innovation towards decentralized anonymous stable coins that you neither can stop nor scrutinize?

[darewaller]

If governments are able to collect taxes from stablecoins, I don't see why they'd want to get rid of them in the first place. Stablecoins could benefit traditional Fiat currencies, as governments use them as "experimental grounds" for their own CBDCs.

Most governments might be already monitoring the progress of stablecoins but I'm not sure they will consider stable coins as the testing ground for their CBDC because stable coins are limited to crypto space but CBDCs are not having any such limit.

There are a lot of possibilities for governments to collect taxes from stablecoin holders as most currently available stablecoins are corporate based hence any kind of regulation will be possible for government against stablecoins.

I read on this forum about decentralized stablecoin but not sure about its progress as of now.

Yeah, I am also looking for a truly decentralized stablecoins but I'm not seeing anything like that to be launched in any near future.

[slashz9]

I think it can't be done, because they can't do it even if they use the news to corner the stable coin but it will be hard to stop and it will not be stopped.
the only way is to make their own currency and starting from scratch will probably take some time to join but taking over the whole market is very unlikely.

[AndySt]

Either governments use stablecoins for their own benefit or destroy them altogether. If governments are able to collect taxes from stablecoins, I don't see why they'd want to get rid of them in the first place. Stablecoins could benefit traditional Fiat currencies, as governments use them as "experimental grounds" for their own CBDCs. Some people believe that governments will use pre-existing stablecoins (instead of creating their own digital currencies from scratch) as the new standard of money in the future. Whenever that will become a reality or not, it's yet to be determined. If stablecoins were to live alongside CBDCs, they're going to have to "play by the rules". Otherwise, they'll fade into oblivion leaving people only with decentralized cryptocurrencies and traditional Fiat (via CBDCs).

I am not sure that any government will use any stablecoins as a model for their digital currencies, because there are different principles of functioning and the only common thing can be the use of blockchain as the main technology and nothing more. Even more so, I am not sure that governments will use stablecoins in their activities at all. However, this does not negate the fact that stablecoins and digital currencies can completely coexist and there will not necessarily be bans in this area. Here everything is strictly individual in each state and is directly dependent on the attitude to cryptocurrencies in general.

[WalkerIVIV]

Of course, I doubt about destroying stablecoins, but they will take measures for sure. They will impose taxes, introduce some prohibitions. Some countries may ban the whole thing in principle

The probitions will never work and did you see so many prohibitions on bitcoin in the past? that proves if that will be useless. The government has no choice other than adopt crypto.
So many banks and big companies have been starting to adopt crypto. The government will never able to ban crypto or stable coin.
This digital currency will always exist in the future. They can only give taxation.

[VanDeinsberg12]

They definitely gonna destroy them if they sees the stablecoin owned by private company could conflict with their interest, imagine what action a government would take to  get back all the market shares for it once they figure out that their CBDC most likely not gonna be as popular as the already established stablecoins.

Of course, I doubt about destroying stablecoins, but they will take measures for sure. They will impose taxes, introduce some prohibitions. Some countries may ban the whole thing in principle

Definitely taxes at every corner so they can make profit off it the same amount generated from their own version of stablecoin this so called CBDC. but I'm pretty sure most of them gonna oppose the idea of private company trying to compete with them, after all most of government likes to monopoly things.
Just wait until all these CBDC released to public it's gonna shake the whole crypto market not because its usability but because the fuss about regulation around it.

[whiteblue]

I think it can't be done, because they can't do it even if they use the news to corner the stable coin but it will be hard to stop and it will not be stopped.
the only way is to make their own currency and starting from scratch will probably take some time to join but taking over the whole market is very unlikely.

If there are parties who want to corner the stable coin at this point, it is very ridiculous because nowadays almost all use stable coins at different needs and on average they use it when trading, and another one to take over all the market is such a huge job that only some of the groups will not be able to do it.

[ashmodeus]

for what ? i don't see stablecoins is a threat for them/governments , the real threat is a bitcoin, eth , and many many , and now , they even have no idea how to stop it , instead of destroying it, they even just adopt it.

[Jaered]

I think stable coins are here to stay, nothing would happen to it. The sheer will of the entire crypto community is enough to make them immune from government meddling

[Miaallen]

Whether stable or utility coin, there is none any government can quash. The current suit between the US SEC and the Ripple (XRP) as an organisation is a proof. The case proves that the individuals that adopts a cryptocurrency are the major determinant of what it becomes. You can also see what has become of the Shit coins lately.

[leea-1334]

Of course, I doubt about destroying stablecoins, but they will take measures for sure. They will impose taxes, introduce some prohibitions. Some countries may ban the whole thing in principle

The probitions will never work and did you see so many prohibitions on bitcoin in the past? that proves if that will be useless. The government has no choice other than adopt crypto.
So many banks and big companies have been starting to adopt crypto. The government will never able to ban crypto or stable coin.
This digital currency will always exist in the future. They can only give taxation.

Prohibitions will not work on decentralized currencies like Bitcoin of course since they are always easily found and available on p2p networks and not just on centralized exchanges.

But stablecoins are by nature centralized. If they are banned, no regular exchanges will want them and very few p2p people do Tether swaps,,, much less other stablecoins!

[beerlover]

Prohibitions will not work on decentralized currencies like Bitcoin of course since they are always easily found and available on p2p networks and not just on centralized exchanges.

But stablecoins are by nature centralized. If they are banned, no regular exchanges will want them and very few p2p people do Tether swaps,,, much less other stablecoins!

Yes, there are a lot of chances for governments to prohibit stablecoins for any reason. If anything like that happens then we cannot expect those reputed exchanges will keep listing stablecoins as they need to comply with government rules, they will simply delist stablecoins.

I'm not expecting people will go for P2P way of trading for centralized things. Because, if governments prohibit stablecoins then its value may not remain stable which means there will be no more point of trading them even in P2P manner. I am also in favor of decentralized stabelcoins. Hopefully we will get something like that in coming years.

[Ozero]

Whether stable or utility coin, there is none any government can quash. The current suit between the US SEC and the Ripple (XRP) as an organisation is a proof. The case proves that the individuals that adopts a cryptocurrency are the major determinant of what it becomes. You can also see what has become of the Shit coins lately.

The subject of the lawsuit in the ripple case was that the SEC believed that two executives at Ripple Labs had abused the coin. There were no claims from the SEC to the circulation of the XRP coin itself, and therefore nothing threatened it from the very beginning.
The situation with stablecoins is completely different. A significant part of them are backed by the currency of states, and these states can claim that their currency is their property and prohibit anyone from using it as collateral for the circulation of other stablecoins. Since the existing stablecoins are direct competitors of the CBDC states that will appear soon, then such a move by the states would be quite logical. The Chinese government already attributes this in its regulations, which will ensure the circulation of the Chinese digitalized yuan.

[Almasani]

As stablecoins become more popular in the mainstream world, many are starting to wonder whenever governments will allow the industry to flourish or destroy it altogether. We've seen how interested central banks and mainstream governments are in launching digital currencies of their own. Something like a stablecoin would prove to be a huge threat to the existence of Fiat. I wouldn't put decentralized cryptocurrencies on this, because they're largely unstable. Only stablecoins pegged to the USD like Tether or USD Coin could pose a real threat to the financial sovereignty of Fiat currencies like the traditional US Dollar. Either governments use pre-existing stablecoins as their own, or create new ones from scratch (most likely situation) effectively putting an end to stablecoins' preeminence in the mainstream world.

What are your thoughts?

But what we should know is that USDT is a global business. And it benefits the government if they work well together, not by destroying what is already there. USDT or as stable as coins that already exist today are not only in America but also on various exchanges in various countries. This means that they get support from other countries. If the government issues other stable coins, of course they will also have to get support from various other countries to be recognized as official coins, equivalent to real money. Although crypto is easily circulated, the government has the power to blacklist every coin if they consider the coin to be unofficial.