Are stablecoins safe?

[ChillyMatthew]

Hello Crypto Fam.

So, the FSB has released a recommendation on stablecoin regulation. They are doubting the notion that stablecoins are "stable," arguing that issuers lack the necessary tools to keep their stablecoin peg at all times, implying that no stablecoin currently meets their recommendations.

This is what they said about it:

“Most existing stablecoin issuers promise (implicitly or explicitly) to maintain a stable value, typically relative to a single fiat currency. However, many of these existing stablecoins are issued by unregistered and unlicensed entities and do not have credible mechanisms to support their promise of price stability.”

What do you guys think about this? Would you recommend the use of stablecoins or they just aren't worth the risk?

Original source of the story:

https://tokenist.com/fsb-says-no-stablecoin-currently-passes-its-recommendations/

[1714860192]

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[zasad@]

If your country has cryptocurrency legislation, then you can safely store Tether (USDT) and USD Coin (USDC) bought on the exchange, because these are the most common stablecoins. But the issuer can block your coins. Most of my savings are in DAI, because for now it is a reliable decentralized stablecoin, but I will not give you guarantees that this will not change in the future.

[Tony116]

It is incorrect to say that stablecoins are unlicensed, unregistered, but they are considered insecure because of their centralized nature. Since it is a centralized managed by a 3rd party, holding them is not too different when you hold the currency, your assets can be frozen or locked at any time.

Stablecoins are quite an important part of the market, the use of which is sometimes mandatory because we need to use them in some cases like DCA, or have to use them when the market starts to fluctuate...we need stable assets to avoid a bear market. You can use them normally but don't keep them for too long will not benefit you.

[Yatsan]

Depends on how you would define 'safe'. If you mean "safe from losses", technically it is not  simply because currencies especially cryptos' market value are naturally volatile. Stable coins are not really 'stable', it is just that their market prices does not move that much from a price point unlike with other cryptos which often break barriers depending on market behavior. But indeed it would be less risky to invest your money with, in comparison with others.

If it is 'safe' from hacking, fraud, and the likes, that would depend on the network that particular currency is using as well as its security in general. Safer to invest, yes. Less risk of losing huge amount of money, also yes. But keep in mind that the bigger the risk, the bigger the profit, so quite balance things out depending on your aim as an investment. You should not expect that much of profit if you will be choosing stable coins as investment.

[WalkerIVIV]

I have been using stable token since a few years ago and nothing happened with my money. People are feeling worried when nothing was happening with it. So many FUD statement has come from the various parties. If you think that's not safe and then never try to use it otherwise if you think that's safe and then just use it anytime. There's no safe place in the crypto, i used my safest stable token like BUSD

[Aliem Nur]

stable coins can be said to be safe but on condition that you also have to store them well,
because we know that currently there are many cases of hackers, choose stable coins such as BUSD, USDT and USDC,
don't buy other than that because it is very risky for Rugpull.

[jrrsparkles]

Nothing is safe as long as they are under cryptocurrency

Stop blabbering, crypto currency is not an authority to say there is something under them and the term crypto currency is generally used to address the decentralized peer to peer mode of transaction which is completely safe no matter what.

Stable coins aren't really a cryptocurrency they are using blockchain technology but hold high risk than fiat.

[fzkto]

Nothing is safe as long as they are under cryptocurrency

Stop blabbering, crypto currency is not an authority to say there is something under them and the term crypto currency is generally used to address the decentralized peer to peer mode of transaction which is completely safe no matter what.

Stable coins aren't really a cryptocurrency they are using blockchain technology but hold high risk than fiat.

You also contradict your own words. Cryptocurrency is a blockchain and stabelcoins are built on the blockchain of different projects like ETH or TRX, BNB, LUNA . Except there is no security in any of these projects. I will not talk about LUNA. But BNB and ETH can block your funds, so using stablecoins cannot be called safe for any of us.

[Henrobakkara]

Hello Crypto Fam.

So, the FSB has released a recommendation on stablecoin regulation. They are doubting the notion that stablecoins are "stable," arguing that issuers lack the necessary tools to keep their stablecoin peg at all times, implying that no stablecoin currently meets their recommendations.

This is what they said about it:

“Most existing stablecoin issuers promise (implicitly or explicitly) to maintain a stable value, typically relative to a single fiat currency. However, many of these existing stablecoins are issued by unregistered and unlicensed entities and do not have credible mechanisms to support their promise of price stability.”

What do you guys think about this? Would you recommend the use of stablecoins or they just aren't worth the risk?

Original source of the story:

https://tokenist.com/fsb-says-no-stablecoin-currently-passes-its-recommendations/

I treat all cryptocurrencies the same. I understand that we all look to stablecoins when the market is dipping to save our overall portfolio value but I however believe that even stablecoins are not totally safe from crashing either just like every other crypto. After all, they are projects setups like other crypto and for some reason can crash like them too.

[tvplus006]

I treat all cryptocurrencies the same. I understand that we all look to stablecoins when the market is dipping to save our overall portfolio value but I however believe that even stablecoins are not totally safe from crashing either just like every other crypto. After all, they are projects setups like other crypto and for some reason can crash like them too.

Storing stablecoins on your wallet is dangerous for many reasons that it makes no sense to list here. Therefore, if you are not planning to buy in the near future, it will be reasonable to transfer such stablecoins to fiat. Moreover, thanks to p2p, it is very easy and very fast to do.

[jrrsparkles]

Nothing is safe as long as they are under cryptocurrency

Stop blabbering, crypto currency is not an authority to say there is something under them and the term crypto currency is generally used to address the decentralized peer to peer mode of transaction which is completely safe no matter what.

Stable coins aren't really a cryptocurrency they are using blockchain technology but hold high risk than fiat.

You also contradict your own words. Cryptocurrency is a blockchain and stabelcoins are built on the blockchain of different projects like ETH or TRX, BNB, LUNA . Except there is no security in any of these projects. I will not talk about LUNA. But BNB and ETH can block your funds, so using stablecoins cannot be called safe for any of us.

What I meant to say is cryptocurrency uses the blockchain technology but the utility of blockchain is beyond cryptocurrency for example to poll election votes do there will be complete transparency and will be caught if tampered.

Stable coins uses centralized blockchain which means the project itself control the nodes where as the true cryptocurrency like bitcoin are decentralized not backed by anything simply got the value from demand and supply.

[TravelMug]

I treat all cryptocurrencies the same. I understand that we all look to stablecoins when the market is dipping to save our overall portfolio value but I however believe that even stablecoins are not totally safe from crashing either just like every other crypto. After all, they are projects setups like other crypto and for some reason can crash like them too.

Storing stablecoins on your wallet is dangerous for many reasons that it makes no sense to list here. Therefore, if you are not planning to buy in the near future, it will be reasonable to transfer such stablecoins to fiat. Moreover, thanks to p2p, it is very easy and very fast to do.

Stable coin have had it's use for us, you can convert your crypto to stable coins as hedge to volatility, and vice versa, convert your stable coins to crypto if you want to do trades. But yes with the advent of P2P it's easy to handle stable coins to fiat and very quick.

But still the question though, it is safe, as we don't know if this stable coins projects are back up 1:1 against the dollar or they are just running on fractional reserves just like bank. Really hard to answer this though, for me, I used stable coins, but I don't put everything on them. And if I will ever had to transfer my crypto to stable coins, I will simply withdraw it P2P.

[goldkingcoiner]

USDT and BUSD are safest at the moment, I would say. They have existed for the longest as stablecoins and have never lost anyone money. Unlike exchanges which get hacked or scam people out of their coins. Which is why I would also say USDT is safer than BUSD. Simply because of BUSD's connection to Binance through the Binance Smart Chain (as well as because of the chains pseudo-centralized nature.)

Although With ETH 2.0, I would rate USDT lower and put both of them on the same level of trust.

[Odusko]

I treat all cryptocurrencies the same. I understand that we all look to stablecoins when the market is dipping to save our overall portfolio value but I however believe that even stablecoins are not totally safe from crashing either just like every other crypto. After all, they are project setups like other crypto and for some reason can crash like them too.

Storing stablecoins in your wallet is dangerous for many reasons that it makes no sense to list here. Therefore, if you are not planning to buy shortly, it will be reasonable to transfer such stablecoins to fiat. Moreover, thanks to p2p, it is very easy and very fast to do.

Why should I store stablecoin when I am not ready to use it for transactions, stablecoin has its price peg to centralized currencies like united states dollars and from time to time the price may fluctuate but it will definitely bounce back to its fixed price that is a peg with.
The bit in some situations like that of the Luna USTD crash where the stablecoin crumble, so the risk of holding it is still there. It then becomes better to always have the coins converted totally into fiat to avoid holding a large chunk of coins that do not have any potential to increase but decrease at the interval.

[Pierre 2]

Honestly noone is sure with pegging mechanisms that work to make them equal to 1 usd. Obviously USDT or Tether and BUSD are the most used and common ones since there are many trading pairs with them. Anyways its far better to hold perfectly legal real USD. I sort of prefer USDC to both of these cause Coinbase is more regulated/reviewed/evaluated than Binance or Bitfinex in my opinion. I wish we had better method, like official USD coin issued by USA that we could use. None of them are %100 safe.

[Hamza2424]

A funny and repeatedly asked question bro its really hard to convince yourself that some of the stablecoins are safe because we are living in the two types of market merge timeline where centralized finance is not over yet and decentralized finance is fully not the dominant. These are two same different things as Algrothmic stable coins are good in terms of the asset's scalability and transparency that reserves are clear and these coins are trustworthy but about their peg system, UST is an example.
On another hand there USDT and USDC no clear reserves but their + point is their stability and peg system reserves are highly sheddy and these are non-trustworthy.

[GreatArkansas]

Take an example of what happened on Terra Luna's stable coin which is called UST, basically, this UST is a stablecoin pegged in United States Dollars as 1:1
But then again, there was some hole and some others said, there are people who attacked this UST stablecoin and caused it to de-pegged which started to lose it's value from 1:1 to USD. Then until now, it was worth nothing already. There's no safe stablecoin, just be careful.

[siniminomorocomunisakito]

The FSB has issued a “Draft Opinion on Cryptocurrencies, Digital Assets and Blockchain”, which is actually quite informative and worth reading. just following the current pulse of the market, to know what may need to be regulated in the future.

True, Stablecoins are gaining popularity, several prominent figures in the cryptocurrency industry have warned users about them. I think we will see in the future if any of them are actually able to provide support for a stable financial ecosystem.

[DapanasFruit]

We should be learning that everything in the world of cryptocurrency is never stable much more those who are using the word "stable" and yes even including USDT which still has to released its full audit promised 5 years ago. And this is a big lesson that FTX and Sam Bankman-Fried are teaching us. This year we are dealt with many platform collapse but the biggest collapse can be USDT in case the many doubts about it can be coming true...let's hope this will not be happening anytime. In the industry that is supposed to be the OPPOSITE of the traditional financial and banking system, one thing we have seen is that it can just be the same. Let's all wish that this painful era can be the purge and cleanse period so that something good can be coming out of it.

[Wexnident]

Just look at Luna(UST) then I reckon you'd get your answer. It may be a single instance, but it's still an instance nonetheless to take into account. I'd honestly just avoid holding any stablecoins for a long period of time if possible, I've only ever used stablecoins when paying/moving stuff, the rest of what is in my wallet is always invested in some crypto for the long term.

Here's an old post by mk4 about stablecoins
https://bitcointalk.org/index.php?topic=5204055.0