USDC and Banking

[33QE]

I think USDC is making their move to introduce CBDC into the market.

The problem with the US is that if you operate a money transmitter business in the US , you need to have a Bond for each individual state which starts at like 1M USD+. Other states have varying rates for their bond but it operates as an insurance for sending money.

Now Banking licenses are also hard to acquire but USDC (Circle) has purchased their own Bank and they are acquiring their own Banking licenses.

My theory is that with that , they can turn fiat -> USDC direct for their users.

The SPAC they held for the acquisition of the bank itself would allow them to become the bank. I think this is the one thing that was missing in the US regarding crypto. Coinbase couldn't do this but Circle i believe has been able to succeed and i think they will be catalyst to the CBDCs.

So the question is... Are you ready and prepared for the CBDCs?

What do you think this will do to the crypto market with USDC becoming the standard?

Tether? Any other stablecoins?

https://www.pymnts.com/cryptocurrency/2022/circle-getting-closer-to-applying-for-digital-bank-license/

[jackg]

I was just checking out their website earlier yesterday and it looks like they offer high yield on usdc staked with them too (4.8% max) that looked quite impressive.

I thought they had partnerships with coinbase and some other crypto firms already too, allowing direct banking between usdc, usd and crypto does sound like a good thing but there's a chance someone bigger has noticed what they're doing and might compete to attempt to absorb the market (or them).

[bitmover]

I was just checking out their website earlier yesterday and it looks like they offer high yield on usdc staked with them too (4.8% max) that looked quite impressive.

I decided to look for it and found the link:
https://www.circle.com/en/products/yield

It pays from 4%APY (for one month) to 4.5% APY now for one year locked.

This is still quite impressive. For anyone holding USDC, it doesn't add a lot of extra risk to stake with them (as they are the issuer of the coin)

The only down side are the KYC and privacy implications.

There are however some other good paying alternatives.
In Binance you can find 10% APY for BUSD and USDT up to 2000 BUSD/USDT locked, which is amazing as well. It adds some risk, as you are now keeping some coins in an exchange. https://www.binance.com/en/earn

[fiulpro]

One interesting aspect if CBDCs are going to be launched they can be used as a trading tool instead of USDT since that is certainly not getting any comebacks and have failed the market but people do need some digital currency to trade from therefore I do think that if the time is right and the government is not creating any additional rules and unnecessary regulations regarding trading it can actually be good and it would ofcourse be backed up by the government so it won't be that volatile which what usdt lacked but should have been pegged 1:1. What do you think about it ?

[hugeblack]

After LUNA hyped, I think that it is better for platforms that provide staking services and for investors to stay away from investing heavily in stablecoins in order to achieve easy and quick profits.
The principle of proving staking in these currencies has proven that it has a point of failure and then the return is like 8 and 10 you will lose if the link between these coins and the value of 1 dollar is broken.

So I don't think this is good news, especially if Coinbase stock investments was bad and the cryptocurrency start a bear market, how will USDC be able to pay the 8% APY?

[AmoreJaz]

After LUNA hyped, I think that it is better for platforms that provide staking services and for investors to stay away from investing heavily in stablecoins in order to achieve easy and quick profits.
The principle of proving staking in these currencies has proven that it has a point of failure and then the return is like 8 and 10 you will lose if the link between these coins and the value of 1 dollar is broken.

So I don't think this is good news, especially if Coinbase stock investments was bad and the cryptocurrency start a bear market, how will USDC be able to pay the 8% APY?

given that USDC is pegged to actual USD assets, what is the likelihood that in time some of its owners will exit this market, creating another catastrophe in the stablecoin industry? im not being pessimistic here but we need to consider worst possible scenario. we can't say, the people behind USDC will forever be loyal to their project. at some point, they may feel exhausted and just want to cash out their share.
it is a good question, how can they sustain the APY offered to their customers?

[33QE]

One interesting aspect if CBDCs are going to be launched they can be used as a trading tool instead of USDT since that is certainly not getting any comebacks and have failed the market but people do need some digital currency to trade from therefore I do think that if the time is right and the government is not creating any additional rules and unnecessary regulations regarding trading it can actually be good and it would ofcourse be backed up by the government so it won't be that volatile which what usdt lacked but should have been pegged 1:1. What do you think about it ?

"Permit me to issue and control the money of a nation, and I care not who makes its laws!"

Mayer Amschel Rothschild.

After LUNA hyped, I think that it is better for platforms that provide staking services and for investors to stay away from investing heavily in stablecoins in order to achieve easy and quick profits.
The principle of proving staking in these currencies has proven that it has a point of failure and then the return is like 8 and 10 you will lose if the link between these coins and the value of 1 dollar is broken.

So I don't think this is good news, especially if Coinbase stock investments was bad and the cryptocurrency start a bear market, how will USDC be able to pay the 8% APY?

given that USDC is pegged to actual USD assets, what is the likelihood that in time some of its owners will exit this market, creating another catastrophe in the stablecoin industry? im not being pessimistic here but we need to consider worst possible scenario. we can't say, the people behind USDC will forever be loyal to their project. at some point, they may feel exhausted and just want to cash out their share.
it is a good question, how can they sustain the APY offered to their customers?

They got Blackrock backing them. I remember they were holding what ,like 11T in assets?I think personally the smartest thing is Mortgage Backed Securites (MBS) in crypto form , Give it backing so you can earn a yield over a period of time. Makes the most sense to me. Turn slums into A AA AAA. People are over leveraged on their mortgages and with the market acting the way it is , We are at a point when a lot of people are broke. Crime Rises , People can't pay their mortgages , and foreclose , Black rock swoops in and buys all of the property at a discount and then turns them into MBS on the Chain.


Ultimately if you print the money... Who governs you? No one. Are you accountable? No.  You can print governments GDPs. You can overthrow governments and cause coups... All you gotta do is Quantitative ease. BRRRRRRRRRRRRRRRRRRRRRRRR

After LUNA hyped, I think that it is better for platforms that provide staking services and for investors to stay away from investing heavily in stablecoins in order to achieve easy and quick profits.
The principle of proving staking in these currencies has proven that it has a point of failure and then the return is like 8 and 10 you will lose if the link between these coins and the value of 1 dollar is broken.

So I don't think this is good news, especially if Coinbase stock investments was bad and the cryptocurrency start a bear market, how will USDC be able to pay the 8% APY?

given that USDC is pegged to actual USD assets, what is the likelihood that in time some of its owners will exit this market, creating another catastrophe in the stablecoin industry? im not being pessimistic here but we need to consider worst possible scenario. we can't say, the people behind USDC will forever be loyal to their project. at some point, they may feel exhausted and just want to cash out their share.
it is a good question, how can they sustain the APY offered to their customers?

I think they're gonna use it as a means of bankrupting the citizens , and then take everything at a discount. 2008 is gonna happen again i believe truly...Just this time it'll be digital.

YOU VILL EAT ZEE BUGZ
YOU VILL OWN NOTHING
YOU VILL BE HAPPI

(Klaus)

[avikz]

I think USDC is making their move to introduce CBDC into the market.

And may I ask you, how?? USDC is a crypto company and CBDC is a "central bank digital currency". So not just USDC, rather any commercial banks can't introduce CBDC unless specifically authorised or instructed by the central bank of that country. So regardless of the fact whether the company had purchased a bank or not, CBDC is not something they can operate legally.

So the question is... Are you ready and prepared for the CBDCs?

If I look from the perspective of convenience, then CBDC is great. But if I am looking from the perspective of my financial privacy, then it's a bad thing that can happen in my life. Now choose accordingly.

[hugeblack]

it is a good question, how can they sustain the APY offered to their customers?

If they continue to make profits, they will not have a problem because more hot money will flow in and those will remain for a long time, but when problems occur then we will see how strong their financial position is and how well their cash management is.
Therefore, even 8% is not considered high if you compare it to rates, for example, 10% in Binance and others, but the main difference is the degree of solidity of those who print these coins.

[Moneyprism]

why are people now pushing the combination of cryptocurrencies and traditional banking too much? .. even though these are two contradictory things .. initially cryptocurrency was developed to be able to realize financial freedom from traditional banking, but now we are increasingly difficult to realize the original goal of crytocurrency

[33QE]

I think USDC is making their move to introduce CBDC into the market.

And may I ask you, how?? USDC is a crypto company and CBDC is a "central bank digital currency". So not just USDC, rather any commercial banks can't introduce CBDC unless specifically authorised or instructed by the central bank of that country. So regardless of the fact whether the company had purchased a bank or not, CBDC is not something they can operate legally.

So the question is... Are you ready and prepared for the CBDCs?

If I look from the perspective of convenience, then CBDC is great. But if I am looking from the perspective of my financial privacy, then it's a bad thing that can happen in my life. Now choose accordingly.

Circle was founded in 2013. A month after Circle announced its decision to merge with Concord, the crypto firm declared it would seek a charter to become a full-reserve national commercial bank.

https://www.bankingdive.com/news/circle-seeks-national-charter-to-start-digital-currency-bank/604701/

why are people now pushing the combination of cryptocurrencies and traditional banking too much? .. even though these are two contradictory things .. initially cryptocurrency was developed to be able to realize financial freedom from traditional banking, but now we are increasingly difficult to realize the original goal of crytocurrency

It's not about traditional banking or money.

It's about power.

I think we knew in the back of our minds that this technology (blockchain / crypto etc) could lead us down towards two roads.

One a dystopian future and the other utopia.

Sometimes i look in the mirror and i see a young george soros staring back at me.

[jackg]

After LUNA hyped, I think that it is better for platforms that provide staking services and for investors to stay away from investing heavily in stablecoins in order to achieve easy and quick profits.
The principle of proving staking in these currencies has proven that it has a point of failure and then the return is like 8 and 10 you will lose if the link between these coins and the value of 1 dollar is broken.

So I don't think this is good news, especially if Coinbase stock investments was bad and the cryptocurrency start a bear market, how will USDC be able to pay the 8% APY?

given that USDC is pegged to actual USD assets, what is the likelihood that in time some of its owners will exit this market, creating another catastrophe in the stablecoin industry? im not being pessimistic here but we need to consider worst possible scenario. we can't say, the people behind USDC will forever be loyal to their project. at some point, they may feel exhausted and just want to cash out their share.
it is a good question, how can they sustain the APY offered to their customers?

In response to stablecoins being risky from hugeblack, I don't think we should fully compare luna (a non collateralised stablecoin) with one that is. Sure if you've put funds into the coin, there'll probably still be somewhere and it might not take much to prop it back up (perhaps 20% or something to restore the peg). I don't think anyone running a stablecoin well has decided to mint coins and give them away or has expectations of losing their billions somewhere else (it's likely they're invested to bolster company profits - likely in stocks or bonds - so can just easily be used to restore the peg). Stablecoins may die out when crypto stops growing, that's not happened yet and their main purpose currently is to offer faster transfers (when fast exchanges aren't needed, neither will they).

They may be incurring a loss on that usdc or using it for other products or assets.

I'd say 3% is probably a stable amount that can be offered to customers if you don't lock funds, I've seen uninsured investment services last quite a long time after offering over 5% fixed interest for locked funds which could be what circle are doing.

They might also be able to get higher interest on loans given to crypto related companies but with good backing/insider knowledge to be more assured those loans won't collapse.

[TheGreatPython]

it is a good question, how can they sustain the APY offered to their customers?

If they continue to make profits, they will not have a problem because more hot money will flow in and those will remain for a long time, but when problems occur then we will see how strong their financial position is and how well their cash management is.
Therefore, even 8% is not considered high if you compare it to rates, for example, 10% in Binance and others, but the main difference is the degree of solidity of those who print these coins.

I do not think that this is going to be like that. I believe that they are going to end up with something like offering this type of situation for a while and then they are going to drop it and make it more sustainable when they have enough. This is the same with banks, and same with all the other places that offered a high amount return APY for the stablecoins.

Let's assume that you offer 50% for people who put in USDC or USDT and then there are 10 billion dollars invested, and then you drop it to 10% which is sustainable and then there will be some people who leave but you will still have a few billion dollars left and people will not leave. That's what they are trusting it.

[Hydrogen]

Now Banking licenses are also hard to acquire but USDC (Circle) has purchased their own Bank and they are acquiring their own Banking licenses.

Years ago, there were news articles claiming that circle's purchase of poloniex crypto exchange.

Was conducted on behalf of goldman sachs who was claimed to be a principal investor/owner of circle.

If its true they have no need to acquire a banking license, as they are operating as a subsidiary of a bank.

I think that's accurate but TBH I'm not 100% knowledgeable on the legal status of it.