Is it possible stable coins could have their own bank?

[Cryptomultiplier]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

[barbara44]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

I assume that we are already into it. Yeah, unlike traditional banking, these days I am able to open a bank checking account online without visiting any branches; this is very much similar to registering an account in a crypto exchange with KYC. I agree there are few differences like debitcard, check facility, overdrafting etc.. but we can find other third party services to work with cryptocurrencies to avail exact similar functionalities.

I mean bitcoin was developed to provide banking facility to each and every human without trusting any central authorities including governments and here stablecoins providing additional layer of simplicity to take banking  facility to needed people.

the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

Definitely will call. But, I believe we do not need any regulation/legalization for that to make it more common among all people; only awareness is enough. But, we need to remember stablecoins are not decentralized which means they may collapse at any time or government may seize. So, holding a big money in stablecoin is highly NOT recommended.

[jrrsparkles]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

Stable coins that runs on blockchain doesn't necessarily need banks because we get to store the coins in the blockchain itself so there is no job for bank in this process but that's different when it comes to CBDC cause it's backed to that fiat value of the country so mostly you need bank account to connect your CBDC wallet since that is the most preferred way for verification until now in CBDCs.

[adaseb]

They could have their own bank but that’s not the goal of stablecoins. When stablecoins were first released it was so users could transfer money from exchanges such as Bitfinex to exchanges which had tons of altcoins which the bigger exchanges didn’t have.

So the user wouldn’t need to sell their US dollars, buy bitcoin, send bitcoin to some alt exchange and then sell that bitcoin for US dollar and finally buy what alt coin they want. This is too many transactions and hence why stablecoins were introduced because you could send back and forth between exchanges.

There is no point is having a bank for stablecoins however. Just send to your exchange, sell for fiat and withdraw that fiat to your bank and buy whatever you want.

[mk4]

I think what you're describing is pretty much a CBDC.

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

I don't think it even matters much of stablecoins have their own bank. What matters most is that they have proof that these stablecoins actually have a 1:1 backing on whatever bank as long as the bank is decent.

[Lakai01]

I think what you're describing is pretty much a CBDC.

Exactly, he is describing a CBDC issued by a central bank, eg. the European Central Bank.
However, centrally issued CBDCs are the subject of much controversy, primarily due to their programmability (which ECB boss Lagarde, for example, has described as a "major breakthrough") and the resulting process of displacement of traditional currencies and cash.

[BlackBoss_]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

They have their own banks, with private keys, with valuable assets to back their stable coins.

A biggest stable coin Tether USD has its transparency page and audit report.
https://coinmarketcap.com/currencies/tether/
Tether's transparency
Independent Auditor's report (March 2024)

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile

If a stable coin is mint from thin air, without backed assets like US. dollar, gold, is it still a stable coin?

Its value will crash to $0 when people detect this terrible fact.
A deep dive into valuation and depegging of stablecoins

[mk4]

However, centrally issued CBDCs are the subject of much controversy, primarily due to their programmability (which ECB boss Lagarde, for example, has described as a "major breakthrough") and the resulting process of displacement of traditional currencies and cash.

Not 100% sure, but I'm pretty sure USDT/USDC are pretty much 'programmable' as well, with their lock functions and stuff.

But yea, safe to assume that CBDCs will be far stricter as they're highly more likely to comply with regulations and stuff, so locking of funds are highly more likely in my opinion.

[Lakai01]

Not 100% sure, but I'm pretty sure USDT/USDC are pretty much 'programmable' as well, with their lock functions and stuff.

But yea, safe to assume that CBDCs will be far stricter as they're highly more likely to comply with regulations and stuff, so locking of funds are highly more likely in my opinion.

They are programmable, that is true.
However, the programmability of CBDCs (e.g. that of the digital euro) should go even further. One "feature", for example, is that unused capital expires after a few months and is set to 0. So you are forced to spend the money, saving is not possible with a digital euro.

Programmability can therefore also have a negative consequence

[GreatArkansas]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Overall it's always possible. As we all know stablecoins have a lot of issues, especially decentralization and regulations.

So the major problem here is the regulation. As you can see the current famous stablecoins, Tether(USDT) and Circle (USDC) are already like banks, and they already encountered a lot of issues recently.

[siniminomorocomunisakito]

the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

Definitely will call. But, I believe we do not need any regulation/legalization for that to make it more common among all people; only awareness is enough. But, we need to remember stablecoins are not decentralized which means they may collapse at any time or government may seize. So, holding a big money in stablecoin is highly NOT recommended.

From what I read from the explanation it seems quite reasonable and very risky if there is no one to back it up and at any time it could collapse. Will it be like UST in the future? I hope not.

[pooya87]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

For any coin to have its own bank they don't need to be "backed" by anything. The criteria is to be centralized which stablecoins already are. That means the answer is yes they can have their own bank.

After all the dollar itself is not backed by anything and it has its own banks simply because it is centralized!

This is exactly why there is a flaw in this design. You see centralization and blockchain technology don't mix well. It is like addition of contradictions!

[EarnOnVictor]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

Why not? The world is getting more digital and with the acceptance of cryptocurrency in many climes, there is no way some banks will not be transacting in the USDT and it will be easier for them if their country is such that is crypto-friendly. But this will be cryptocurrency banks because there are wide distinctions between the USD and USDT, and I can't possibly think that any central bank would want to mix that up. First, it is the USD that can back the USDT and not the other way around. Also, the fact that the central bank can not oversight and control the USDT, they will not be able to allow the regular commercial banks to get involved in such.

However, special crypto banks will be doing that, and I believe it is already happening with the current ones, though I have never used them before to know their mode of operation. Nevertheless, for a bank in China to involve itself with illegal underground USDT operations in a country that frowns so much on cryptocurrency means that even the commercial banks that are dealing with fiats will still try it despite knowing that it will never gain the support of the central bank.

Link: https://www.theblock.co/post/294777/china-busts-1-9-billion-underground-banking-operation-using-usdt

[retreat]

It's possible that when stablecoins have their own bank, maybe they want to provide banking services and then they buy a bank that is going bankrupt in a country, then after operating and getting permission to launch crypto assets, they launch their own stablecoins product. However, the question is, how important is this bank to users, because if the stablecoins company only wants to target the global crypto market, then they don't need to have a bank since they can launch their stablecoins product to market easily. Because the most important thing for users to trust these stablecoins is that the company is legal, has strict audits, and reserve assets that can be accounted for to users.

[batang_bitcoin]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Pooya explained it well what you are describing.

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

They're actually working as that right now. And there will be more and bigger institutions that will make their own stable coins. Lately, we've seen that PayPal launched their own stable coins, PYUSD. They're not a bank but they function like a bank, a storage, an exchange and as well as remittance for everybody.

[senyorito123]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

We don't need to have bank on our assets for stablecoins, our encrypted wallets is one of the best security. Banks isn't a reliable storage for this because the control is not in our end anymore. Digital wallets like metamask, trustwallet and different trusted platforms. These coins is now running through crypo network like bsc chain, ethereum and trx which made it more sustainable when it comes to trading.

[MRY]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

We don't need to have bank on our assets for stablecoins, our encrypted wallets is one of the best security. Banks isn't a reliable storage for this because the control is not in our end anymore. Digital wallets like metamask, trustwallet and different trusted platforms. These coins is now running through crypo network like bsc chain, ethereum and trx which made it more sustainable when it comes to trading.

Exactly, for long-term investments like what you are doing, it is very smart, it is better to store assets in the form of cryptocurrency such as Bitcoin in wallets such as Electrum and others. Because a wallet like this can be stored for a very long time and will not be affected when a problem occurs at the exchange which causes the exchange to close.

[OcTradism]

For any coin to have its own bank they don't need to be "backed" by anything. The criteria is to be centralized which stablecoins already are. That means the answer is yes they can have their own bank.

After all the dollar itself is not backed by anything and it has its own banks simply because it is centralized!

This is exactly why there is a flaw in this design. You see centralization and blockchain technology don't mix well. It is like addition of contradictions!

Their coin or token value is backed by quality of idea from which their project initiated and their recent, current and future development ideas and plans as well as how they already fulfilled their development promises to investors through roadmaps and how will the complete their development plans in future.

Stable coins backed by gold, US. dollar or any fiat currency but except gold, all fiat currencies can be printed from thin air by governments. It does not help for a coin or token value if it is backed by something from thin air.

Gold has production cost but its value is from demands too because exchange price rate of gold has big contribution from demand, not only or mostly comes from its production cost.

Like the USA. national debt can be temporary resolved by a check that can be created by centralized decision but in reality the debt is there, not vanish anywhere.

[SamReomo]

Most of the Stable Coins have backed by huge liquidity pool and they make their earning by stacking and or by other means like transaction fees etc.

I don't believe that there could be a bank who may be the back of those stable coins but surely there is chance of some huge investment companies owning those stable coins or maybe governments IDK.

But when it comes to CBDC's then surely they are part of a government's money system and that's why they have their bank. CBDC's

[Bureau]

Is it possible stable coins could have their own bank since they are backed by a country's currency like the U.S Dollar which they use to maintain a stable value?

Or also, knowing that stablecoins are different from cryptoassets which do not have assets as backings and are more volatile, will in the future, the success of stablecoins not call for something like a bank or a recognized office building built to show legalization and acceptance as a means of payments for transactions and services?

Stable coins are backed by USD and the US doesn't consider them as a currency that is why they won't be have a bank. Stable coins use blockchains which means all transactions are recorded and kept for infinity that is another reason why the won't needs bank. I doubt any country will ever legalize stable coin as doing it they will be accepting USD as thier currency.